“I don’t ever second-guess Elon.”
That’s how Palantir co-founder Joe Lonsdale sums up his view on the rising speculation around a potential SpaceX–xAI merger.
While he believes the idea has merit, Lonsdale isn’t convinced it represents the final shape of Elon Musk’s business empire.
Lonsdale, a seasoned tech entrepreneur and investor with deep roots in defense and artificial intelligence, co-founded Palantir and now leads venture firm 8VC, which manages over $6 billion in assets. Forbes estimates his net worth at around $3 billion.
He acknowledges that rockets, satellites, data, and compute naturally overlap. As AI increasingly becomes core infrastructure, pairing it with a global space and connectivity platform could unlock massive advantages.
Still, despite his optimism around xAI and confidence in Musk, Lonsdale stops short of backing a full-scale merger.
SpaceX has reportedly explored acquiring or merging with xAI ahead of a possible IPO. The main argument is that Starlink offers a powerful distribution network that could rapidly accelerate xAI’s growth, alongside longer-term ambitions around space-based computing tied to Starship.
Recent reports suggest SpaceX was last valued near $800 billion, with IPO expectations approaching $1 trillion. Some estimates place a future valuation above $1.5 trillion. Meanwhile, xAI raised $20 billion at a $230 billion valuation, and SpaceX is said to have invested $2 billion into the AI company.
Lonsdale sees the strategic logic, but believes focus beats scale. In his view, separate, highly driven teams tend to outperform giant consolidated structures.
SpaceX and xAI may be Musk’s strongest assets today, but Lonsdale argues their strength comes from operating as distinct machines rather than a single mega-entity.
SpaceX is already a serious cash generator, with reported revenue of $15–16 billion last year and nearly $8 billion in EBITDA, largely driven by Starlink, which now makes up the bulk of its business.
xAI, on the other hand, shows strong traction but heavy financial risk. Grok reportedly has around 64 million monthly users and strong government contracts, yet Reuters says the company generated just $107 million in quarterly revenue while burning nearly $8 billion in under a year.
In short, Lonsdale sees clear synergy between Musk’s companies — but not enough to justify merging them into one. His stance: collaboration makes sense, consolidation does not.