SpaceX-xAI Merge? Palantir Billionaire Shares Insights

“I don’t ever second-guess Elon.” This concise yet profound statement from Joe Lonsdale, co-founder of Palantir Technologies and head of venture capital firm 8VC, encapsulates a prevailing sentiment in the tech world. Lonsdale’s remarks come amidst burgeoning discussions regarding a potential merger between Elon Musk’s aerospace giant, SpaceX, and his artificial intelligence venture, xAI. While acknowledging the compelling substance behind such a proposition, Lonsdale urges caution against viewing this as an inevitable endgame for Musk’s expansive portfolio.

Lonsdale, a luminary in the tech and investment landscape with a formidable background in defense and AI, commands a net worth estimated at $3 billion, managing over $6 billion in capital through 8VC. His insights are particularly pertinent given the obvious overlaps: rockets, satellites, data, and advanced computing. The rapid evolution of AI into a foundational infrastructure, when married with SpaceX's aggressive space and connectivity platforms, presents a synergy with potentially extraordinary benefits. Yet, despite his admiration for xAI’s trajectory and Musk’s unparalleled acumen, Lonsdale refrains from fully endorsing a mega-merger, preferring a more focused approach.

The Strategic Nexus: SpaceX and xAI's Potential Convergence

The concept of SpaceX potentially merging with or acquiring xAI has gained traction, particularly ahead of a rumored SpaceX Initial Public Offering (IPO). The core rationale pivots on Starlink's colossal distribution pipeline, offering xAI an accelerated pathway to scale its AI solutions globally. Furthermore, long-term visions include leveraging SpaceX’s capabilities for space-based computing, potentially in collaboration with entities like NASA and utilizing the Starship platform.

Valuations and Investments: A Glimpse into the Giants

• SpaceX, following a recent insider share sale, was valued near $800 billion, with IPO expectations potentially soaring to $1 trillion, as reported by Reuters. Projections even suggest SpaceX could raise $50 billion at a valuation exceeding $1.5 trillion in an IPO slated for late 2026.
• xAI recently secured $20 billion in a Series E funding round, propelling its valuation to $230 billion. The Wall Street Journal also highlighted SpaceX’s agreement to invest $2 billion into xAI as part of this fundraising initiative, underscoring the intrinsic links already forming between the two entities.

Joe Lonsdale's Perspective: Focus Over Consolidation

While Lonsdale openly admits to not second-guessing Elon Musk, his endorsement doesn't extend to the idea of merging all of Musk's disparate business ventures into one monolithic entity. He readily acknowledges the undeniable synergy between SpaceX and xAI, particularly how SpaceX’s mission-driven engineering culture can fuel xAI’s voracious appetite for computational power. However, his experience as a founder and investor leads him to believe that focus often trumps sheer scale.

Musk’s empire is a vast and interconnected web of innovation, spanning diverse sectors:

• Tesla: A pioneer in electric vehicles, energy storage, solar power, autonomous driving software, and increasingly, "physical AI" through robotics like Optimus.
• SpaceX: The private aerospace company behind Falcon and Starship, revolutionizing space travel and satellite internet with Starlink, with ambitious long-term plans for Mars colonization.
• xAI: Musk’s ambitious AI venture, developing the Grok chatbot and large language models, and importantly, owning X (formerly Twitter). It competes directly with industry leaders like OpenAI and Anthropic.
• Neuralink: A neurotechnology company dedicated to developing implantable brain-computer interfaces for cognitive enhancement.
• The Boring Company: An infrastructure firm focused on developing underground transit systems to alleviate urban congestion.

Despite the clear complementary aspects, Lonsdale injects a crucial caveat: in his experience, fostering separate, focused teams tends to yield better results than attempting to integrate everything under a single corporate roof. He notes xAI's rapid growth and Musk's deep involvement, yet cautions against a "merge everything" approach, emphasizing that distinct businesses with clear missions often outperform overly consolidated structures.

SpaceX's Economic Trajectory: A Powerhouse in Space and Connectivity

SpaceX is no longer merely a visionary project; it has evolved into a robust, growing business with impressive financial metrics. Reports indicate the company generated an impressive $15 to $16 billion in sales last year, coupled with nearly $8 billion in EBITDA. This is a remarkable achievement for an entity simultaneously investing millions into the development of Starship and its advanced systems.

Starlink: The Financial Backbone

The primary growth engine for SpaceX is unequivocally Starlink, which is estimated to contribute between 50% to 80% of its total revenue. What began as an ambitious side project – satellite internet – has effectively transformed into the company’s financial bedrock. Since 2019, SpaceX has launched over 9,500 Starlink satellites, serving more than 9 million users globally, establishing itself as the world's largest satellite operator.

Strategic acquisitions, such as EchoStar's $19 billion investment in wireless spectrum, further pave the way for expansive sales opportunities, particularly with direct-to-device connectivity. If SpaceX can continue to scale effectively, it is positioned to capture a significant share of an immense total addressable market. Industry forecasts by McKinsey & Company project the global space economy to potentially surge to $1.8 trillion by 2035, a substantial leap from $630 billion in 2023. Specifically, the satellite internet market alone is forecasted by Grand View Research to reach an incredible $22.4 billion by the end of this decade.

xAI's Ambition vs. Economic Reality

Lonsdale’s observations on Fox Business regarding xAI's gaining traction last year are substantiated by compelling data. An internal update revealed Grok's monthly user base reaching nearly 64 million as of September 2025. While this figure trails behind titans like Google’s Gemini or Anthropic’s Claude, it unequivocally demonstrates that Grok has transcended its experimental phase to become a significant player in the AI chatbot arena.

Performance and Strategic Engagements

Grok's performance metrics are equally impressive. On the crowdsourced Text Arena leaderboard, which synthesizes millions of blind head-to-head model comparisons, Grok-4.1-thinking secured a commendable second rank with approximately 5.1 million votes as of late January 2026. Real-world traction is further solidified by a series of high-profile deals:

• The Pentagon’s Chief Digital and AI Office awarded xAI a contract with a ceiling of up to $200 million for the development of agentic AI workflows.
• The U.S. General Services Administration sealed a major OneGov deal, making Grok accessible to federal agencies for a nominal fee through March 2027.
• xAI also announced a crucial agreement with Saudi Arabia’s HUMAIN to design hyperscale GPU data centers and deploy Grok nationwide.

The Financial Challenge

Despite these impressive advancements, the financial narrative for xAI presents a notable challenge. A Reuters report indicated that xAI generated $107 million in quarterly sales but recorded substantial losses of $1.46 billion during the same period. More critically, the company reportedly burned through a worrying $7.8 billion in just nine months as it aggressively pursues scaling its operations. This financial dynamic highlights the inherent risks and massive investment required to compete at the forefront of the generative AI space.

In conclusion, the potential SpaceX-xAI merger embodies a fascinating intersection of technological synergy, ambitious vision, and stark financial realities. Joe Lonsdale's nuanced perspective underscores the delicate balance between capitalizing on complementary strengths and maintaining the focused drive essential for groundbreaking innovation. While the allure of a consolidated Musk empire is strong, the path forward, as Lonsdale suggests, might benefit more from strategic collaboration and distinct operational focus rather than an all-encompassing merger.