A trillion-euro space and AI giant emerges
Elon Musk’s SpaceX has surged to a valuation of $1.25 trillion (€1.06tn) after merging with his artificial intelligence venture xAI, dramatically narrowing the gap with Tesla and reshaping the balance of his business empire. Tesla’s market value now sits at about $1.58 trillion (€1.34tn), only around a quarter higher than SpaceX’s latest private valuation. On paper, Musk now derives more of his personal wealth from rockets and satellites than from electric cars.
The timing highlights a shift in momentum. Tesla stumbled at the start of 2026, with its shares down roughly 6% for the year. The company reported a 16% drop in vehicle deliveries in early January and a 3% fall in total revenue for 2025 — the first annual decline in its history. Increased competition in China and Europe, combined with the loss of a US federal EV tax credit, has put pressure on the core car business. Musk’s political activity, including close ties to the Trump administration and support for far-right figures in Europe, has also weighed on the brand.
From cars to robots as Tesla searches for growth
With electric vehicle demand cooling, Musk is pushing Tesla toward new bets, notably robotaxi services and its Optimus humanoid robots — both still far from becoming major revenue drivers. Last week, he told analysts the company would end production of the Model S and Model X, which made up less than 3% of deliveries last year, and convert those lines for Optimus manufacturing.
SpaceX, by contrast, is thriving in its core markets. It dominates orbital launch services and holds multi-billion-dollar contracts with NASA and the US Department of Defense. Its Starlink satellite internet network now has more than 9,000 satellites in orbit and roughly nine million customers worldwide. Under the newly announced deal, SpaceX is valued at $1 trillion (€847bn), while xAI is valued at $250 billion (€212bn).
The merger follows last year’s move in which xAI acquired the social media platform X, formerly Twitter. Musk has said the SpaceX-xAI combination is designed to support the development of space-based data centres, which he argues could sidestep energy constraints on Earth. Analysts, however, caution that such ambitions face steep technical, financial and supply-chain hurdles, including radiation shielding, cooling systems and the sheer cost of launching heavy infrastructure into orbit.
Big ambitions meet regulatory headwinds
The eye-catching valuation also brings new risks. Profits from SpaceX could be diverted to fund xAI’s infrastructure push, while the AI company itself is under regulatory scrutiny in multiple regions. Authorities in Europe, India, Malaysia and the US are investigating xAI’s Grok image generator after it was allegedly used to create explicit deepfake images of women and children. In France, investigators this week raided offices linked to X as part of a probe into possible algorithmic abuse.
Legal experts warn that some of these issues could spill over into SpaceX, especially given Starlink’s global footprint. For now, Musk may find it easier to manage such risks while SpaceX remains privately held and firmly under his control. A future public listing, however, would force investors to weigh that towering valuation against growing political and regulatory uncertainty.
