The Federal Trade Commission (FTC) has granted Tesla (NASDAQ:TSLA) approval to convert its investment in xAI into a stake in SpaceX, according to a recent filing.

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The filings also indicated that Musk, who is the CEO of both companies, sold portions of the holdings to several investors, including Valor Equity Partners and DJF Growth. Details including the size of the deals were not disclosed. The size of the deal must be reported if its value is over $133.9 million.

These filings come amid SpaceX gears up for its IPO, which Musk hinted at a $1.75 trillion valuation, driven by SpaceX's plans for Mars colonization and orbital expansion.

The company is reportedly preparing to file confidentially for an IPO as early as next month, aiming for a June listing that could raise up to $50 billion, potentially surpassing Saudi Aramco's $29 billion debut to become the largest IPO in history.

Last week, Citigroup joined the list of banks preparing for the IPO. 

Bank of America, Goldman Sachs Group, JPMorgan Chase, and Morgan Stanley, Royal Bank of Canada and Mizuho are also understood to be participating in the IPO process, Bloomberg noted.

Tesla announced in its fourth quarter earnings that it would invest $2 billion into xAI. Tesla is participating in xAI's Series E funding round, which recently raised a total of $20 billion and values the firm at $230 billion.

Last month, Musk announced that SpaceX had acquired his artificial intelligence startup xAI. The transaction valued SpaceX at about $1 trillion and xAI at roughly $250 billion, reported Reuters, citing people familiar with the matter.

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