Elon Musk Says SpaceX, Tesla Form Committees to Explore Merger in Potential Record Tie-Up

Elon Musk said SpaceX and Tesla have formed special committees to explore a potential merger, a preliminary step toward what would rank as the largest corporate tie-up of all time.

Speaking Tuesday on SpaceX's earnings webcast, the chief executive of both companies said there was "a lot of merit" in combining them, citing cooperation on developing superintelligence software. "I do think there's a lot of merit to combining the companies," Musk said. "There's a lot to be gained from cooperating on developing superintelligence software."

Musk said he is not participating in the committee discussions because he is a conflicted party, and that the committees have yet to agree on terms.

A blockbuster deal would unite Tesla's electric vehicle, energy and robotics businesses with SpaceX's rocket launch and satellite internet operations. Underpinning it all are the companies' shared ambitions in artificial intelligence — or what some in the industry are now calling superintelligence — fuelling investments in areas such as data centres and driverless cars.

The scale is staggering. SpaceX, formally known as Space Exploration Technologies, has a market value of about US$2 trillion, while Tesla is worth nearly US$1.5 trillion. Both rank among the largest companies in the world and hold dominant positions in their respective industries.

Market reaction

SpaceX shares surged 8.1 per cent in post-market trading after the webcast, with Tesla climbing 1.8 per cent, according to the most recent updates to the report. Tesla is scheduled to release its third-quarter results on Thursday morning (AEDT).

Musk cautioned that a merger is not certain and would require shareholder support. He said Tesla would need approval from 50 per cent of all shareholders, rather than simply a majority of those voting. "Some people out there assume that a SpaceX and Tesla merger is a certainty," Musk said. "I think that would be overstating it." He also said the outcome rests with the special committees of both companies.

The two companies already share numerous business ties, overlapping investor bases and even some shared personnel. The rocket maker has purchased more than US$100 million worth of Tesla Cybertrucks, while xAI is a major customer of Tesla's utility-scale batteries.

Long-anticipated combination

Speculation about the space company buying the EV maker has gained traction recently. Barclays suggested last week that a deal could be announced before Tesla's annual meeting in December, according to the report.

A combination has been widely expected since SpaceX rode a wave of investor enthusiasm to a record initial public offering this year, giving the company both currency and an implicit green light from shareholders to make a play for Tesla — a move that, as Bloomberg reported, made Musk the world's first trillionaire. Bloomberg News reported in January that SpaceX had weighed a Tesla merger before ultimately deciding to acquire xAI, Musk's AI startup.

Musk has in the past tantalised shareholders with the idea of combining the two businesses.

First profit as a public company

The webcast followed SpaceX reporting its first profit as a public company. Musk said it was tracking an annual revenue run rate of up to US$1 trillion, according to the report.

Revenue climbed 161 per cent to US$14.58 billion for the three months ended Sept. 30 from a year earlier. AI revenue surged by almost 10 times to US$7.56 billion, mostly from renting out data-centre capacity to developers such as Anthropic, Alphabet's Google and Reflection AI rather than from SpaceX's own models.

"We are in an inflection moment for SpaceX across launch, connectivity and superintelligence," Musk said on the call. He ended his prepared remarks with a seemingly off-script line: "In a nutshell, what this implies for SpaceX annual recurring revenue by the end of '27 is somewhere between US$500 billion and a trillion."

The third quarter offered the clearest evidence yet that SpaceX's heavy investment in AI is translating into revenue, even as spending on compute infrastructure remains enormous — capital expenses nearly tripled during the quarter.

The merger discussions come as Musk's two flagship companies lean into the same AI-driven growth thesis, with SpaceX's compute business rapidly expanding alongside Tesla's efforts in driverless cars and robotics. Any deal would rank as the largest corporate tie-up of all time, dwarfing prior mega-mergers in market value.