Elon Musk’s aerospace company SpaceX and his artificial intelligence venture xAI are in discussions to merge ahead of a potential initial public offering (IPO) later this year, according to people familiar with the matter and Reuters reporting.

Under the proposed plan, xAI would be combined with SpaceX, bringing together assets including Starlink satellites, the Grok AI chatbot, and the social media platform X under a single corporate structure. The merger talks are in early stages, and a final agreement has not been reached, with timing and specific terms still fluid, the sources said.

The potential merger aligns with SpaceX’s ambition to broaden its technological footprint and support strategic initiatives such as space-based data centres, large-scale AI computing, and integrated platform synergies. SpaceX is targeting a mid-2026 IPO with a valuation that could exceed $1 trillion, making it one of the largest public offerings in history.

While regulatory filings in Nevada indicate preparations for merger entities, neither SpaceX nor xAI has publicly commented on the discussions. The outcome, if realised, could have significant implications for how Musk’s major ventures integrate and compete with global tech and AI leaders.