Recurring Epstein Files character Elon Musk may merge one of his most successful ventures with one of his least, and is reportedly on the verge of combining rocket company SpaceX with Bay Area-based xAI.

A whole bunch more Epstein Files dropped over the weekend if you hadn’t noticed, and hoo lawdy, they sure are chock full of mentions of Tesla CEO Elon Musk. This is obviously uncomfortable for Musk, because the emails show him practically begging for invites to the notorious Epstein island, despite the fact that Musk has long claimed that he “refused” such invites, and the fact that Musk has fancied himself some sort of advocate for releasing the Epstein Files.

That public relations curveball for Musk (he was backpedaling on Xitter all weekend) may or may not complicate things with Musk’s numerous business ventures. But there seems to be some significant movement afoot with Musk’s business ventures, as Bloomberg reports that Musk is in “advanced talks” to merge his AI company xAI with his rocket ship company SpaceX. The rationale is that SpaceX is an enormously profitable company, while xAI is losing money like mad, so this may help xAI’s balance sheets as Musk seeks a higher on-paper valuation.  

We should note that despite Musk’s alleged hatred of California, xAI is headquartered in Palo Alto, and also has a San Francisco office. And X(itter) has been under the xAI umbrella since last year.

And the motivation here appears to be to mask how xAI is burning through nearly $1 billion a month. Bloomberg reports that Musk’s “vision for an artificial intelligence-powered world has grown too costly for any one of his entities to shoulder alone." As far as how soon the merger or combination could happen, Bloomberg says that Musk and his team “have informed some of their investors about the plans,” and that “they may announce an agreement as soon as this week”

While xAI is hemorrhaging money, SpaceX is fabulously profitable. While it is a private company and these numbers cannot be confirmed, analysts estimate SpaceX made $8 billion in profit last year, and their expected 2026 IPO is anticipated to be a blockbuster.

But the AI company xAI is seen as lagging behind its competitors OpenAI and Anthropic. Indeed, xAI might only break through among people who want to use it to generate porn. But xAI does have some pretty substantial military contracts, so you figure that gravy train will keep running for the remainder of the Trump administration.

Related: xAI's Grok Being Blocked, Investigated By Multiple Countries Over the Creation of Sexualized Deepfakes [SFist]

Image: WASHINGTON, DC - NOVEMBER 19: Crown Prince and Prime Minister Mohammed bin Salman of Saudi Arabia sits next to Tesla CEO Elon Musk as U.S. President Donald Trump deliver remarks at the U.S.-Saudi Investment Forum at the Kennedy Center on November 19, 2025 in Washington, DC. The forum is intended to bring together business leaders, innovators and political leaders with the goal of strengthening economic ties and promoting investment between the United States and Saudi Arabia. (Photo by Win McNamee/Getty Images)