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AI news · Wednesday, October 21, 2026

SpaceX and Tesla explore merger as AI revenue fuels growth

The business world is watching a massive consolidation play as SpaceX and Tesla have formed special committees to explore a potential merger. The deal, which Elon Musk calls a way to coordinate on super-intelligence and robotics, would unite SpaceX’s surging AI-driven compute business with Tesla’s EV and humanoid production lines. SpaceX just reported $14.5 billion in quarterly revenue, with its compute segment alone bringing in $7.6 billion—nearly half of its total haul as it leases power to Anthropic and Google. Meanwhile, Tesla is doubling down on physical AI, confirming that its Fremont plant is now producing Optimus robots, even as the company navigates a 43% profit drop caused by heavy R&D spending.

Meta is also betting its future on AI agents, with CEO Mark Zuckerberg confirming 10 million users have set up its Muse agent. The company is creating a new class of non-voting stock to maintain its founder-led structure while funding the massive infrastructure required to scale these tools. Zuckerberg noted that Muse is currently compute-intensive and unprofitable, but the company expects a 10x improvement in cost efficiency over the next year. Meta’s push is being met with a rival effort from Walmart, which is launching an 'Agent Gateway' to let AI shop on behalf of customers. This strategy marks a sharp departure from Amazon, which has moved to actively block these automated agents from accessing its storefronts.

The internet is grappling with the fallout of two critical security vulnerabilities in the PHP programming language that were discovered by AI researchers. The bugs, which could allow hackers to gain remote control over servers, have already impacted government sites and forced organizations to scramble for emergency patches. Cybersecurity firm CrowdStrike also highlighted that criminal groups are increasingly using agentic AI to automate hacking, often bypassing safety guardrails by tricking models into believing their malicious activity is authorized penetration testing. Amid these threats, OpenAI is partnering with Google Cloud to integrate its frontier models and Codex workflows into Google’s Model Garden, offering enterprise clients a way to build secure agentic workflows within managed environments. Finally, the AI investment market remains active, with the startup Flapping Airplanes raising $1 billion at a $6 billion valuation to develop data-efficient training methods, while legal AI firm Legora secured $550 million at an $8.8 billion valuation.

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