Elon Musk’s journey to becoming the world’s first trillionaire is increasingly driven by his ambitious ventures into space and artificial intelligence, rather than his well-known electric car company.
This week, Musk made history by crossing the $800 billion mark, with Forbes estimating his net worth at an astonishing $845 billion. This immense wealth now surpasses the combined fortunes of the next three richest individuals: Google co-founders Larry Page and Sergey Brin, and Meta CEO Mark Zuckerberg.
SpaceX and xAI: A New Era of Wealth
The dramatic surge in Musk’s fortune is largely due to a monumental shift within his business empire. His aerospace and defense company, SpaceX, recently acquired his artificial intelligence and social media firm, xAI. This colossal deal valued the newly combined entity at an estimated $1.25 trillion.
With approximately 43 percent ownership in this merged enterprise, Musk’s stake alone is now worth over $530 billion, meaning SpaceX and xAI collectively account for nearly two-thirds of his total wealth.
Tesla Takes a Backseat
This pivot is clearly visible in Tesla’s recent proxy filings, where the company acknowledged that ‘a majority of Mr. Musk’s wealth is now derived from other business ventures.’ This statement underscores Tesla’s diminishing role as the primary driver of Musk’s financial standing.
Musk has expressed intentions to take SpaceX public in 2026, a move that would further diversify his liquid assets away from Tesla. However, some market observers are cautious about how public investors might value a company that merges a government defense contractor and satellite operator with an AI developer that demands significant capital to compete with tech giants like Google, OpenAI, and Anthropic.
Government Contracts and the Quest for Capital
SpaceX’s considerable scale is heavily supported by government contracts, having secured more than $20 billion in federal deals, with more on the horizon. Musk himself has articulated his vision for the xAI acquisition as a stride towards developing “orbital data centers.”
According to Greg Martin, a managing director at Rainmaker Securities, while the merger might ‘muddle up’ the narrative for a pure-play SpaceX investor, it significantly expands the opportunities. He notes that merging with xAI, which has an ‘insatiable need for capital,’ makes sense for accessing broader capital markets.
Navigating Regulatory and Political Challenges
Despite its rapid growth, xAI faces its share of challenges. The company is currently under investigation in Europe, Asia, Australia, and California due to concerns that its Grok image generator facilitated the creation of explicit deepfake content. The regulatory implications for the SpaceX-xAI merger itself are yet to be fully understood. Additionally, Democratic senators have called for a Pentagon probe into SpaceX regarding alleged undisclosed Chinese investors.
Tesla’s Lingering Importance
Despite the rising prominence of SpaceX, Tesla still holds substantial importance for Elon Musk. Last year, shareholders approved a lucrative compensation package that could award him up to $1 trillion over the next decade, provided Tesla achieves ambitious market capitalization and operational milestones. The first phase of this payout is triggered only if Tesla reaches a $2 trillion valuation, which is approximately $460 billion above its current levels.
Tesla’s rationale for this package was explicitly to ‘prevent him from prioritizing those other ventures.’ However, Columbia Law professor Dorothy Lund suggests this strategy might not be fully effective, as Musk divides his attention across multiple demanding companies.
The Trillionaire Threshold
Prior to the xAI deal, Musk held approximately 42 percent of SpaceX and controlled 80 percent of its voting power, while his Tesla ownership ranged between 11 and 15 percent.
With Tesla shares having seen a 9 percent decline this year amidst weaker auto sales and delays in robotaxi and robotics projects, SpaceX and xAI now appear to be the clearest route for Musk to achieve trillionaire status. To reach this milestone, based on his current stakes, the combined SpaceX-xAI entity would need to be valued at around $1.6 trillion, assuming Tesla’s valuation remains stable.
Some investors, like Ross Gerber, CEO of Gerber Kawasaki, speculate that Musk might never take SpaceX public independently. Instead, Gerber anticipates a future merger of SpaceX and Tesla under a unified brand, potentially named ‘X,’ as a strategic move to establish Musk as a dominant force in the AI landscape.