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Elon Musk’s net worth continued to fall last week as investor concerns about the artificial intelligence (AI) industry pushed SpaceX (NASDAQ:SPCX) stock to its lowest level since August.

Bloomberg data shows that Elon Musk’s wealth fell to $865 billion on Friday, a few weeks after he regained trillionaire status. It dropped by more than $48.5 billion on Friday as US stocks continued to fall.

SpaceX Stock Has Fallen Amid the AI Jitters

The main reason behind the ongoing Musk’s woes is SpaceX, whose stock dropped to $134 on Friday, down sharply from last month’s high of $176.56. It has dropped by 40% from its highest point after its initial public offering (IPO).

A key reason why the stock dropped is that investors are worried that the AI bubble is about to burst. Such a move would have an impact on SpaceX, which raised $40 billion to expand its data center business. In a statement after the fundraising, Musk warned that over 200 neocloud companies were at risk of collapsing because of the funding challenges.

SpaceX also runs Grok, one of the top competitors to ChatGPT and Claude. In the last earnings report, the company confirmed that its AI business had overtaken Starlink to become its biggest revenue earner. Its AI revenue jumped to $7.56 billion in the September quarter, higher than Starlink’s $5.24 billion. 

However, the division is also the most expensive, with its capital expenditure rising to $16.4 billion, much higher than the space and connectivity segments combined. 

SpaceX’s weakness has coincided with that of other large AI companies. Its neocloud competitors like CoreWeave (NASDAQ:CRWV), Nebius (NASDAQ:NBIS), and IREN (NASDAQ:IREN) have all plunged by over 50% from their record highs.

SpaceX and Tesla Merger

On the positive side for Elon Musk, Tesla shares ended the week at $400, up by 34% from its lowest level in July this year. Tesla has jumped after Musk confirmed that he was considering merging the two companies, creating a conglomerate.

Tesla’s business is also expected to benefit from the rising gasoline prices. The average gasoline price has jumped to $4.2, while diesel are hovering around their all-time highs. 

As a result, there is a likelihood that many American customers will embrace EVs, which are cheaper to maintain. Its last delivery report showed that the company delivered 486,532 vehicles in the third quarter, well above the 464,391 that it made. 

A SpaceX-Tesla merger would be bullish for Tesla because its investors would require a premium. In a recent note, Dan Ives estimated that Tesla would be worth about $500 a share in case of a deal.

Elon Musk derives most of his wealth in SpaceX, where he owns about 49% of the company. He also owns about 12% of Tesla, which is equivalent to about $197 billion.

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