Elon Musk confirmed Tuesday that Tesla and SpaceX are formally exploring a merger, announcing on SpaceX's third-quarter earnings call that the boards of both companies have created special committees of independent directors to evaluate a potential deal. The announcement turned months of Wall Street speculation into the first official step toward what Bloomberg called a combination that would rank as the largest corporate tie-up of all time.
File photo: Elon Musk, chief executive of both Tesla and SpaceX.
What Musk Actually Said
Musk told investors on SpaceX's earnings webcast that both boards formed the committees "at the request of shareholders." Because he serves as chief executive of both companies, he said, he cannot take part in the deliberations himself.
"Because I'm a conflicted party, I can't actually be in the discussions of the special committees, so it's this sort of a ... It's an odd kabuki dance where two groups of people are talking, and I can't be in the conversation," Musk said, in remarks carried by multiple outlets.
Musk made clear he backs the idea personally. "Do I think it would be a good idea? Yes," he said, adding that "there's a lot of merit" to combining the companies because both are now racing toward what he called "the superintelligence singularity."
But he stressed the outcome is far from settled. The committees have not agreed on any terms, he said, "and there is no guarantee that they will," noting that shareholders of both companies would ultimately have to approve any deal.
Why a Merger, and Why Now
The idea has been circulating on Wall Street for months and intensified after SpaceX absorbed Musk's artificial-intelligence startup xAI in February. That deal folded xAI — which itself had absorbed the social media platform X in March 2025 — into the rocket company, leaving investors to wonder whether Tesla, the remaining Musk-led giant, would follow.
Musk argued the logic is industrial, not just financial. "There's a lot to be gained from co-operating on developing superintelligence software, chip design, the Terafab obviously, robotics, mass-to-orbit with the Starmind constellation [and] connectivity," he said.
The two companies already work closely together. Tesla and SpaceX are jointly developing the long-awaited Tesla Roadster and the Terafab project, a major chip-making effort in Texas aimed at manufacturing custom artificial-intelligence chips in the United States. According to Bloomberg, SpaceX has purchased more than $100 million worth of Tesla Cybertrucks, while Tesla sells energy-storage products and electric vehicles to the rocket company.
Speculation reached a boil last week when Barclays analyst Dan Levy wrote that a merger could be announced as early as December, ahead of Tesla's annual shareholder meeting. Musk poured cold water on that timeline: proxy materials released this week showed a bare-bones agenda for the December meeting, making a near-term announcement appear unlikely.
The Money Behind It
The scale of a deal is almost hard to grasp. SpaceX is valued at roughly $2 trillion and Tesla at nearly $1.5 trillion, according to Bloomberg and the Wall Street Journal — meaning a combination would unite the world's dominant commercial rocket launcher and satellite-internet operator with the second-largest electric-car maker on the planet.
The news arrived alongside strong numbers. SpaceX reported third-quarter revenue of $14.6 billion, up 161 percent from $5.6 billion a year earlier, comfortably beating analysts' expectations. Quarterly net income came in at $4.4 billion, compared with a $1.1 billion loss in the same period last year, The Times reported. Revenue in SpaceX's "super intelligence" segment, which includes leasing data-center capacity and other AI services, jumped more than 800 percent year-on-year to $7.6 billion.
SpaceX, which listed on the Nasdaq in mid-June in what was described as the largest initial public offering in history, has seen its shares swing from the $135 offering price to above $200 before steadying near $150 in recent weeks. Tesla reports its own third-quarter results after the close on Wednesday.
File photo: Tesla's Gigafactory Texas.
What This Means
If it happens, this would be the biggest corporate consolidation of Musk's career — and he has done this before. Tesla bought the solar company SolarCity, where Musk was the largest shareholder, in 2016, a deal that drew shareholder lawsuits and years of scrutiny over whether he favored his own interests.
That history explains the careful process this time. Neither Musk nor his brother Kimbal is considered an independent director, and the Tesla board's seven independent members include chair Robyn Denholm and former Tesla chief technology officer JB Straubel, according to the company's October proxy filing. SpaceX counts six independent directors, including venture investor Ira Ehrenpreis, who also sits on Tesla's board committees.
Analysts say the deal would create a vertically integrated behemoth spanning data centers, chips, satellite launches, robotics, and cars — every link of the AI supply chain under one roof. But the size that makes it attractive also guarantees scrutiny. A tie-up of this magnitude would face intense regulatory review over competition concerns, and antitrust experts say a $3.5 trillion combined entity would test every merger precedent on the books.
There is also the governance question. With Musk holding majority voting power at SpaceX and substantial ownership at Tesla, the "odd kabuki dance" of independent committees talking without him may satisfy formal requirements while leaving skeptics unconvinced that shareholder interests are fully protected.
File photo: A SpaceX Falcon 9 lifts off during a NASA cargo mission to the International Space Station.
What Happens Next
For now, everything is preliminary. The committees are studying the idea, no terms exist, and Musk himself says a deal may never materialize. Tesla shareholders will need to approve any transaction, and one report noted a merger would require support from a majority of all outstanding Tesla shares.
The immediate catalyst is Tesla's earnings report after the close on Wednesday, where analysts will almost certainly press the company on the merger talks. Musk also recently pledged to give every child in America a SpaceX share next year, a move some analysts read as part of a broader effort to build public and political goodwill around his companies.
Whether this becomes the defining corporate deal of the decade or another Musk moonshot that fades in committee, the direction is unmistakable: after absorbing xAI and X, Musk is openly consolidating his empire around a single bet — that the future belongs to companies that control every layer of artificial intelligence, from the chips to the satellites to the cars.
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