The €1.06 trillion valuation for the combined SpaceX–xAI business narrows the gap with Tesla as Musk bets on AI and space while Tesla struggles with slowing growth and subsidy cuts.
The value of Elon Musk's SpaceX after merging with the artificial intelligence project xAI is estimated at $1.25 trillion (€1.06 trillion), narrowing the gap with Tesla and changing the balance of power in his business empire.
Tesla's market capitalization is around $1.58 trillion (€1.34 trillion) — just 26% higher than the latest private valuation of SpaceX.
Formally, most of Musk's wealth is now attributed to the rocket company rather than the electric vehicle manufacturer.
By early 2026, Tesla's value had decreased. Shares have lost about 6% since the beginning of the year after the company reported a 16% drop in vehicle deliveries and a 3% reduction in total revenue for 2025 — the first annual decline in its history.
The main automotive division is under pressure due to increasing competition in China and Europe, as well as the expiration of the federal tax credit for electric vehicles in the U.S.
The brand is also negatively affected by Musk's political activities, including his ties to the Trump administration and support for far-right figures in Europe.
Decline in electric vehicle sales prompts a bet on robots
Amid slowing electric vehicle sales, Musk has shifted Tesla's focus towards robotaxi services and the Optimus humanoid robots — areas where the company has yet to establish a significant business.
Last week, he informed analysts that Tesla would cease production of the S and X models, which accounted for less than 3% of deliveries in 2025, and production lines would be retooled for Optimus.
In contrast, SpaceX holds a dominant position in its key markets. The company is a leading provider of launch services for cargo into orbit and has multi-billion dollar contracts with NASA and the U.S. Department of Defense.
It also operates the Starlink satellite internet network, which has over 9,000 satellites in orbit and around nine million subscribers.
According to the merger announced this week, SpaceX is valued at $1 trillion (€847 billion), while xAI is valued at $250 billion (€212 billion).
The deal followed last year's agreement in which xAI acquired the social network X, formerly known as Twitter, in a stock swap.
According to Musk, the merger of SpaceX and xAI is intended to support the establishment of data centers in space, which he believes will help avoid energy constraints on Earth.
Experts estimate that launching the project on a full scale in the foreseeable future is unlikely given the technical, logistical, and financial challenges.
The project will require new solutions for radiation protection and cooling systems in space, as well as significant costs for launching and assembling large volumes of heavy equipment.
Political and regulatory risks for X
Despite the high valuation, the merger may create new risks for investors. SpaceX's profits could be directed towards funding xAI's infrastructure, while the AI company itself faces intense scrutiny from regulators in several countries.
Authorities in Europe, India, Malaysia, and the U.S. have launched investigations into xAI's Grok image generator after it was used to create explicit deepfakes featuring images of women and children.
This week, French investigators also conducted searches at X's offices as part of an investigation into alleged algorithm abuses.
Lawyers warn that some of these risks could spill over to SpaceX, especially considering that a significant portion of Starlink's business is international in nature.
For now, these complications are easier to manage while SpaceX remains a private company under Musk's control.
Future public offerings will raise tougher questions about whether investors are willing to support such a high valuation amid new regulatory and political risks.
