Elon Merged SpaceX and xAI in the Biggest Deal Ever. Is Tesla Next?
Speakers
Summary
- SpaceX and xAI have merged, creating a "Musk Industries" entity valued at $1.25 trillion ($1T SpaceX + $250B xAI).
- The core thesis is "Space AI Data Centers": moving compute to orbit solves energy and cooling constraints, utilizing the sun's energy and the vacuum of space.
- A "dual track" strategy is rumored: a potential merger with Tesla (TSLA) or a massive SpaceX IPO where Tesla shareholders get priority allocation.
- Google is identified as a major hidden beneficiary, holding significant equity in both SpaceX (7.5%) and Anthropic (~15%).
- Starlink's "Direct-to-Cell" capabilities (V3 satellites) are projected to disrupt legacy telecom providers by bypassing cell towers entirely.
Trade Ideas
Josh notes that Tesla is currently the "only public instrument" to gain exposure to the Musk ecosystem. He cites Elon Musk's post stating, "Loyalty deserves loyalty," implying Tesla shareholders will get priority access to a SpaceX/xAI IPO. If SpaceX/xAI IPOs or merges with Tesla, TSLA stock becomes a proxy for the $1.25T private entity. The "dual track" pressure forces a repricing of TSLA to include the probability of receiving pre-IPO shares or a merger premium. LONG as the primary vehicle for "Musk Industries" exposure. Regulatory blocking of a mega-merger; SpaceX IPO excludes Tesla holders despite rumors.
Josh states that Starlink's Direct-to-Cell terminals will "replace companies like Verizon and T-Mobile, AT&T" because the service works directly with existing phones (rumored iPhone 18 support). As Starship launches V3 satellites at scale (20x output of Falcon 9), the bandwidth capacity will be sufficient to render terrestrial cell towers obsolete for many users. Legacy telecoms face an existential threat from a global, space-based competitor with lower infrastructure maintenance costs. SHORT the legacy infrastructure providers facing disruption. Regulatory protectionism for US carriers; Starlink bandwidth saturation/latency issues.
Ejaaz questions Nvidia's dominance, asking, "If GPUs end up getting replaced by orbital satellites produced by SpaceX themselves... I don't really see how NVIDIA maintains its position as number one." The Musk thesis relies on vertical integration—building proprietary data centers in space using proprietary energy and potentially proprietary silicon (Dojo/Tesla chips). If the "Space AI" paradigm shifts value from the chip designer (Nvidia) to the launch/energy provider (SpaceX), Nvidia's moat erodes. WATCH for signs of compute spend shifting from merchant silicon (Nvidia) to vertically integrated space infrastructure. Space data centers continue to use Nvidia chips (Colossus clusters currently use Nvidia), negating the bearish thesis.
Ejaaz suggests that competitors to xAI (like OpenAI/Anthropic) will need space access to compete on compute, stating they might "go with someone like Blue Origin, Amazon maybe bullish." If SpaceX monopolizes its launch capacity for xAI/Grok, the rest of the AI industry must find an alternative launch provider. Blue Origin (linked to Amazon/Bezos) is the only viable alternative capital-rich competitor, positioning Amazon to capture the "anti-Musk" space infrastructure market. LONG as the hedge/alternative infrastructure play. Blue Origin fails to reach orbit/scale; SpaceX maintains a total monopoly on cost-efficient launch.
Josh Kale
Co-Host, Limitless Podcast (Bankless)
Josh highlights that Google owns 7.5% of SpaceX and approximately 15% of Anthropic. Investors seeking exposure to the SpaceX monopoly or top-tier AI labs (Anthropic) cannot buy them directly. Google effectively acts as a holding company/ETF for these premier private assets, currently undervalued relative to the sum of its parts. LONG as a "hidden asset" play on the private space/AI boom. Antitrust action forcing Google to divest these stakes; underperformance of Google's core search business.
