Tesla Shifts Investment from xAI to SpaceX Prior to Rocket Company's Public Listing

Tesla Inc. has obtained regulatory approval to convert its investment in Elon Musk's xAI into a minor equity position in SpaceX. This move formalizes the financial connections between the billionaire's two primary enterprises in advance of the rocket manufacturer's scheduled initial public offering.

Documents submitted to the US Federal Trade Commission identify Tesla as the entity acquiring a stake in SpaceX from Musk, who serves as CEO for both corporations. The filings, dated March 11, also indicate that Musk sold portions of his holdings to other investors, such as Valor Equity Partners and DFJ Growth.

Although these disclosures are mandated for transactions exceeding $133.9 million, specific details, including the precise size of the stakes involved, were not made public. Requests for comments from Tesla, SpaceX, Musk, Valor Equity, DFJ Growth, and the FTC were not immediately answered.

According to sources who spoke on condition of anonymity, the Tesla filings are connected to its previously declared $2 billion investment in xAI. This investment is being transferred to SpaceX following the recent merger between the artificial intelligence firm and the space-launch company. Announced just days prior to the SpaceX-xAI combination, this investment would translate to a stake for Tesla of under 1%.

This conversion highlights the ongoing restructuring within Musk's extensive business portfolio ahead of the planned SpaceX IPO this year, which has the potential to be the largest in history. His companies, which span diverse sectors including electric vehicles, rockets, artificial intelligence, and social media, are already deeply interconnected through financial investments, business agreements, and occasionally shared personnel.

Musk purchased the social media platform Twitter in 2022, rebranding it as X, and subsequently merged it with xAI in a deal valued at $33 billion. This sequence of events set the stage for the SpaceX transaction, which was announced in February and created an entity with a reported valuation of $1.25 trillion.

In January, Bloomberg reported that SpaceX had considered a potential merger with Tesla as part of the strategic deliberations that later culminated in the agreement with xAI.