They both are privately held by the same owner! So, with whom are they talking? :-)
Maybe this is a good deal for shareholders of SpaceX and xAI. But then maybe it isn't a good deal for one set of shareholders. I have no idea, but I would love to be a shareholder in SpaceX and would not want to be a shareholer in xAI. Totally depends on the price of course.
Yeah they would totally be doing this if they weren't in dire, desperate need of more money ... pinky promise.
If SpaceX pays too much for it, other SpaceX shareholders have a case against SpaceX leadership. If xAI accepts an offer that is too low, other xAI shareholders have a case against xAI leadership. Given that the leadership is basically the same people, they are very well incentivized to come up with a valuation that is as fair as possible.
And this is not just theoretical, Musk has already been sued successfully once on a similar case, when his companies gave out too much free support to the boring company.
They don't, so why shouldn't he think that way?
The better question is whether or not this merger makes any sense.