Elon Musk Considering Merger Between SpaceX and Tesla

Elon Musk has confirmed that his two largest corporate entities, SpaceX and Tesla, have formed independent special committees to evaluate a potential merger in a move that could create a combined enterprise valued at more than $3.5 trillion.

Speaking on a Tuesday earnings call following SpaceX's latest quarterly results, Musk characterized a corporate union between the $2 trillion aerospace firm and the $1.5 trillion electric vehicle maker as logical given their shared technical focus. Following his comments, SpaceX shares jumped over 8% in after-hours trading, while Tesla stock rose nearly 2%.

Addressing analysts on the call, Musk expressed support for the concept while noting that discussions remain ongoing: "Do I think it would be a good idea? Yes."

He went on to say that:

"I do think there's a lot of merit to combining the companies as we are pretty much in the superintelligence singularity, and there's a lot to be gained from cooperating on developing superintelligence software, chip design, the Terafab obviously, robotics, mass-to-orbit with the Starmind constellation, connectivity."

A combination of SpaceX and Tesla would represent the largest corporate tie-up in history, surpassing SpaceX's $1.25 trillion acquisition of xAI earlier this year. The two companies already share several cross-entity initiatives, including "Terafab", a joint venture focused on computer chip manufacturing. Musk noted that Terafab is slated to produce its first test chip around May or June of next year, with plans for volume production by the third quarter of 2028.

Industry analysts highlighted the manufacturing and technological alignments between the two firms. Jerayr Haleblian, an expert in mergers and acquisitions at the University of California, Riverside, observed:

“In some sense, the core of both businesses are expert manufacturing. From a technology transfer perspective, there should be significant flows of information between businesses. Both firms seem to have expertise in robotics, AI, energy infrastructure. Accordingly, the core skills are applicable across industry sectors. The key to success will be synergistic innovation, which I anticipate will follow from acquisition.”

The merger discussions coincide with strong quarterly financial results for SpaceX, which posted its first quarterly profit as a public company since its record-setting initial public offering in June.

Driven by demand for cloud computing capacity and data center leasing to AI developers such as Anthropic, Google, and Reflection AI, SpaceX's quarterly revenue rose 161% year-over-year to $14.58 billion. AI-related services generated $7.56 billion, while the Starlink satellite-internet division contributed $5.2 billion in revenue, expanding its global subscriber base to 13.6 million. SpaceX reported net income of $4.4 billion for the July–September quarter, turning around a $1.05 billion net loss from the same period last year.

Commenting on the results, Will Rhind, CEO of asset manager GraniteShares, noted:

"SpaceX delivered the quarter the bulls wanted, at least on the top line. The story now is all about AI. The compute contracts signed earlier this year are turning into revenue faster than a lot of people thought."

Any formal merger agreement will require approval from both companies' independent committees and a majority vote from shareholders, including a 50% approval threshold among Tesla investors.