Key Factors
- Palantir’s co-founder drops a pointy tackle the doable SpaceX-xAI merger.
- SpaceX and xAI present main development, with Starlink and Grok driving income and consumer enlargement.
- xAI has gained traction and high-profile offers, however faces vital monetary losses amid speedy scaling.
“I don’t ever second-guess Elon.”
That’s Palantir (PLTR) co-founder Joe Lonsdale’s sharp tackle how he views the rising chatter round a possible SpaceX–xAI tie-up.
Although he feels there’s substance to the thought, he isn’t speeding to the conclusion that it’s the endgame for Tesla (TSLA) CEO Elon Musk’s empire.
For somewhat context, Lonsdale is a tech entrepreneur and investor with a critical pedigree in areas like protection and AI.
He co-founded Palantir Applied sciences and presently runs enterprise capital agency 8VC, which manages greater than $6 billion in capital. In line with Forbes, his internet value is estimated at a whopping $3 billion.
That mentioned, rockets, satellites, information, and computing are apparent areas of overlap. AI is fast-evolving into infrastructure, and if we marry that idea with the perhaps-aggressive house and connectivity platform, the mixed advantages are extraordinary.
Nonetheless, Lonsdale, regardless of the bullishness on xAI and Musk’s acumen, is stopping in need of endorsing an all-in mega-merger.
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Why SpaceX merging with xAI is abruptly on the desk
SpaceX has reportedly mentioned merging with or scooping up xAI forward of a possible SpaceX IPO.
The logic being floated round is that Starlink presents an unlimited distribution pipeline, serving to xAI scale up rapidly. On prime of that, over an extended timeframe, there’s loads of chatter round potential space-based compute concepts linked to NASA and Starship.
The numbers being reported behind the SpaceX-xAI merger
- Following a current insider share sale, SpaceX was final valued close to $800 billion, with IPO expectations near $1 trillion, based on Reuters.
- Studies counsel SpaceX might elevate $50 billion at a valuation exceeding $1.5 trillion in an IPO, with an anticipated date later in 2026 (close to June).
- xAI just lately raised $20 billion at a valuation of $230 billion in a Sequence E funding spherical.
- The Wall Road Journal reported that SpaceX agreed to take a position $2 billion in xAI as a part of a fundraising spherical.
Lonsdale’s “synergy” pitch, with an enormous caveat
Lonsdale isn’t one to second-guess Musk, however that doesn’t actually imply he’s shopping for into the thought of merging all of his companies collectively.
He’s acknowledging the SpaceX–xAI synergy, however feels focus tends to beat scale.
SpaceX and xAI are shifting in tandem and are clearly the picks of Musk’s enterprise empire at this level.
For perspective, Musk’s ambitions span a sprawling net of companies that always overlap in know-how, information, and ambition.
- Tesla: Musk’s public crown jewel, protecting EVs, vitality storage, photo voltaic, autonomous driving software program, and a rising push into “physical AI” with robotics like Optimus
- SpaceX: The non-public rocket big behind Falcon, Starship, and Starlink that’s revolutionizing an rising house economic system and has long-term plans for Mars
- xAI: Musk’s promising AI enterprise behind the favored Grok chatbot and enormous language fashions, which additionally owns X (previously Twitter), because it goes toe-to-toe towards the likes of OpenAI and Anthropic
- Neuralink: A neurotechnology firm creating implantable chips geared towards cognitive enhancement
- The Boring Firm: Musk’s infrastructure play that’s concerned in digging transport tunnels to ease city congestion at a decrease price
That mentioned, Lonsdale believes SpaceX’s mission-driven engineering tradition feeds straight into xAI’s insatiable urge for food for compute.
Significantly with xAI, he believes the corporate is “growing really fast” this 12 months, with Musk within the thick of issues and sweating particulars.
Nevertheless, with a possible “merge everything,” Lonsdale hit the brakes with a founder’s bias.
However, you understand, on the whole, after I’m constructing corporations, it is actually useful to have a core staff that has a very critical focus, and that has upside and metrics towards that focus. And so I would be stunned if all of them bought put collectively without delay.
Joe Lonsdale
8VC founder and managing associate
In his expertise, he argues it’s finest to maintain groups separate when constructing scale, the place a number of targeted companies typically work significantly better than squeezing every thing beneath a single roof.
Inside SpaceX’s present economics and money engine
SpaceX is now working an actual, rising enterprise.
Studies counsel it generated an attention grabbing $15 to $16 billion in gross sales final 12 months, with practically $8 billion in EBITDA, which is a superb end result for a enterprise that’s nonetheless shelling out hundreds of thousands for Starship and its upcoming techniques.
The first development engine for it’s Starlink, which accounts for an estimated 50% to 80% of its income. What reportedly started as a facet venture, satellite tv for pc web has successfully grow to be the corporate’s monetary spine.
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For perspective, SpaceX has launched greater than 9,500 Starlink satellites since 2019 and is presently serving over 9 million customers globally, Reuters reported. This positions it as the most important satellite tv for pc operator.
Nifty acquisitions, such because the $19 billion spent on wi-fi spectrum by EchoStar, are paving the best way for even larger gross sales alternatives with direct-to-device connectivity.
If SpaceX can obtain scale, it’s sitting in a complete addressable market of immense measurement.
For perspective, McKinsey & Firm forecasts the worldwide house economic system might probably surge to $1.8 trillion by 2035, up from $630 billion in 2023.
Particularly taking a look at satellite tv for pc web, Grand View Analysis forecasts the market might attain an unimaginable $22.4 billion by the top of the present decade.
xAI appears legit on paper, however dangerous on the stability sheet
Lonsdale spoke with Fox Enterprise about xAI gaining a ton of traction final 12 months, and the numbers counsel he wasn’t simply speaking vibes.
For starters, an inner replace places Grok’s month-to-month consumer base at practically 64 million as of September 2025, per The Data. Although that determine trails Google’s Gemini or Anthropic’s Claude by a large margin, it’s clear that Grok isn’t a distinct segment experiment anymore.
On the efficiency entrance, Grok impresses as properly.
On the crowdsourced Textual content Enviornment leaderboard, which aggregates hundreds of thousands of blind head-to-head mannequin comparisons, Grok-4.1-thinking ranked second, backed by about 5.1 million votes as of late January 2026.
Actual-world traction can be stacking up with some head-turning offers.
- Pentagon’s Chief Digital and AI Workplace awarded xAI a contract with a whopping ceiling of as much as $200 million for creating agentic AI workflows, CNBC famous.
- The U.S. Basic Companies Administration signed a serious OneGov deal, which makes Grok obtainable to companies for 42 cents per group by March 2027.
- xAI additionally introduced an settlement with Saudi Arabia’s HUMAIN in designing hyperscale GPU information facilities whereas deploying Grok nationwide.
Nevertheless, the place the story breaks down is primarily economics.
In line with a Reuters report, xAI generated $107 million in quarterly gross sales, however bled $1.46 billion in losses, whereas burning a worrying $7.8 billion in simply 9 months because it appears to scale up.
Concerning the authors
Moz (Muslim) Farooque is a monetary journalist, U.S. inventory and crypto analyst, and founding editor at Undervalued Deep Insights.He makes a speciality of deep dives on AI & rising tech, electric-vehicle disruptors, big-tech giants, blockchain & crypto markets, and leisure & media shares.
Celine is a author and editor with over 20 years of expertise and has coated numerous information, options, educational/analysis, and authorized subjects. At TheStreet.com, Celine is a senior editor with expertise throughout retail, shares, investing, private finance, know-how, the economic system, and journey.
