Morgan Stanley Maps AI Ties Between Tesla and SpaceX

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Wall Street Focuses on Physical AI Collaboration

Investing.com — Morgan Stanley reported that SpaceX and Tesla are tightening their technological and operational alignment as both companies pursue what the bank describes as physical AI – deploying artificial intelligence into real-world applications across robotics, energy systems, and manufacturing.

Analysts led by Adam Jonas wrote that the two companies, both led by Elon Musk, “share tech, talent, and infrastructure in a shared mission of converting energy to intelligence.” They pointed to comments from SpaceX President Gwynne Shotwell made ahead of the company’s planned IPO: “There’s no question that there’s synergies between Tesla and SpaceX in our futures, definitely, there’s a convergence of a kind of what we’re all trying to accomplish in the future.”

References to Tesla in SpaceX’s S-1

According to Morgan Stanley, Tesla is referenced 71 times in SpaceX’s S-1 registration statement. Of those mentions, the analysts said 34% relate to explicit Tesla-SpaceX collaboration, while 41% concern governance issues and related-party dealings.

The bank’s team outlined several concrete operational links that are already in place or underway, ranging from advanced chip production to energy, computing, and connectivity.

Joint Chip Manufacturing and Major Hardware Flows

One centerpiece of the relationship, Morgan Stanley noted, is a shared chip manufacturing facility known as Terafab. The plant is being constructed in Texas in partnership with Intel, with a total reported construction cost exceeding $119 billion.

The analysts also highlighted substantial hardware transactions between the companies. SpaceX is expected to buy large quantities of Tesla products, including $506 million of Megapacks and $131 million of Cybertrucks in 2025, in order to support its Colossus compute cluster.

Mutual Infrastructure and Product Integration

Morgan Stanley said that SpaceX and Tesla are co-developing an agentic platform called Macrohard. In parallel, each company is pursuing the goal of achieving 100 gigawatts of annual, vertically integrated solar manufacturing capacity in the United States.

SpaceX, for its part, supplies Tesla with compute and connectivity. The compute capacity is projected by the analysts to reach 4.9 gigawatts by the end of 2027 and 15.3 gigawatts of terrestrial compute capacity by 2031. Additionally, SpaceX’s Starlink network provides satellite connectivity that Tesla is rolling out across its vehicle portfolio, starting with the Cybercab.

Morgan Stanley cited Tesla CFO Bret Johnsen, who said, “connectivity to a humanoid robot or an autonomous car or other any type of flying vehicle is not something that you’re going to do with terrestrial solutions.”

Division of Roles: Compute, Robotics, Energy, and Talent

In exchange, Tesla supplies SpaceX with robotics capabilities that function as data-gathering nodes and part of a distributed compute network, along with energy storage solutions and its manufacturing know-how.

The analysts emphasized the scale difference between the two organizations. Tesla’s workforce exceeds 135,000 employees – more than six times the headcount at SpaceX – a factor Morgan Stanley flagged as a key resource behind Tesla’s manufacturing and operational contribution to the partnership.

Strategic Positioning in Physical AI

Looking ahead, Morgan Stanley argued that as large language models (LLMs) approach what the analysts view as potential performance ceilings, investor interest is likely to pivot toward less-developed arenas such as the physical world.

They wrote that neither Tesla nor SpaceX is a major contributor to the “pure LLM frontier model market,” but contended that this context “reveals a wide open lane in physical AI that these two companies may be uniquely capable of addressing, separately or, more likely, jointly.”

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