SpaceX Surges in Value
Elon Musk’s SpaceX has reached a valuation of $1.25 trillion (€1.06tn) after merging with his artificial intelligence venture xAI, bringing it closer to Tesla’s $1.58 trillion (€1.34tn) market capitalisation. On paper, this makes SpaceX the main driver of Musk’s wealth, surpassing the electric carmaker for the first time. The tie-up reflects Musk’s growing emphasis on AI and space exploration as key pillars of his business empire.
Tesla Faces Slowing Growth and Strategic Shift
Tesla’s performance has softened at the start of 2026, with shares down roughly 6% after reporting a 16% decline in vehicle deliveries and a 3% drop in revenue for 2025 — the company’s first annual revenue decline. Competition from China and Europe, along with the end of US federal EV tax credits, has put pressure on Tesla’s core business. Political controversies surrounding Musk have also added scrutiny.
In response, Tesla is pivoting toward robotaxi services and its Optimus humanoid robots. Last week, Musk announced that production of the Model S and X, which together made up less than 3% of deliveries in 2025, would be halted to repurpose those lines for Optimus — signaling a major strategic shift into untested markets.
SpaceX Dominates But Faces New Risks
SpaceX continues to lead in orbital launches, with multi-billion-dollar contracts from NASA and the US Department of Defense, and operates the Starlink satellite network, which now hosts over 9,000 satellites and nearly nine million users. The merger values SpaceX at $1 trillion (€847bn) and xAI at $250 billion (€212bn), and Musk says it could eventually support space-based data centres to bypass Earth’s energy constraints.
However, the merger introduces new regulatory and political risks. xAI faces investigations in Europe, India, Malaysia, and the US over its Grok image generator, while French authorities recently raided X’s offices amid concerns about algorithmic misuse. Legal experts warn that these risks could extend to SpaceX, particularly because Starlink operates globally. While these challenges are easier to manage while SpaceX remains private, a future public listing could force investors to weigh the high valuation against growing scrutiny and regulatory hurdles.
