Musk Shifts Focus From Cars to Space and AI
Elon Musk’s SpaceX has reached a valuation of $1.25 trillion (€1.06tn) following its merger with artificial intelligence company xAI, bringing it much closer to Tesla’s market cap of $1.58 trillion (€1.34tn). This marks a significant shift in Musk’s business empire, with more of his wealth now tied to his space and AI ventures than to the electric carmaker.
Tesla, meanwhile, has struggled at the start of 2026. The stock is down roughly 6% this year after a 16% drop in vehicle deliveries and a 3% decline in total revenue for 2025 — the first annual fall in the company’s history. Rising competition in China and Europe, combined with the end of federal EV tax credits in the US, has put pressure on Tesla’s core business. Political controversies surrounding Musk have also weighed on the brand.
Tesla Bets on Robots as EV Sales Falter
With electric vehicle sales slowing, Musk is pivoting Tesla toward robotaxi services and the Optimus humanoid robot project. He recently announced plans to halt production of the Model S and Model X — which accounted for less than 3% of deliveries in 2025 — and repurpose those production lines for Optimus. These moves signal a long-term shift, though the new ventures are not yet commercially significant.
SpaceX Dominates but Faces Regulatory Hurdles
In contrast, SpaceX maintains a dominant position in its markets. The company leads global orbital launch services with multi-billion-dollar contracts from NASA and the US Department of Defense. Its Starlink satellite network serves roughly nine million customers with over 9,000 satellites in orbit.
The merger assigns a $1 trillion (€847bn) value to SpaceX and $250 billion (€212bn) to xAI. Musk has said the deal will support ambitious projects such as space-based data centres to bypass Earth’s energy limits, though these remain technically and financially challenging.
However, the merger introduces potential risks. xAI is under scrutiny in multiple countries over its Grok image generator, and French authorities recently raided X’s offices amid a probe into algorithmic misuse. Legal experts warn some regulatory exposure could spill over to SpaceX, particularly through Starlink’s international operations. While these challenges are manageable while SpaceX remains private, a future public listing could force investors to balance the high valuation with mounting political and regulatory risks.
