Elon Musk just pulled off a trillion-dollar merger between SpaceX and xAI, and according to Wedbush analyst Dan Ives, this might just be the opening act. The real show? Potentially folding Tesla Inc. (TSLA) into the mix to create what Ives calls an "AI juggernaut."
The SpaceX-xAI deal valued SpaceX at $1 trillion and xAI at $250 billion. But here's where it gets interesting: SpaceX is now seeking Federal Communications Commission approval to launch up to one million satellites for an orbital data center strategy. These satellites would generate serious computing power—100 kilowatts of compute per ton, to be exact.
Why does this matter? Data center power demand is projected to surge over 150% by 2030. This merger aims to "create a new path to generate a low cost of generating AI compute within the next two to three years — bringing together the top internet/space exploration company with the top data center builders," according to Ives.
Tesla isn't sitting on the sidelines either. The electric vehicle maker revealed during last week's earnings call that it's invested $2 billion into xAI. Ives sees this as the foundation for something bigger—a combined entity that capitalizes on robotics and powers the AI revolution.
"Expect to see more cross-pollination between Tesla and SpaceX over the coming year, which is bullish for the Tesla story in our view," Ives noted.
His ultimate prediction? "Musk wants to own and control more of the AI ecosystem and step by step the holy grail could be combining SpaceX and Tesla over the next 12 to 18 months in some form to give the connected tissue between both disruptive stalwarts looking to lead the AI revolution."
