Elon Musk says Tesla-SpaceX merger being considered

ByKali Hays Technology reporter. Updated 40 minutes ago.

Key points

• Elon Musk has remarked he likes the idea of a merger of Tesla and SpaceX, two of his most notable businesses, and it is under active consideration.
• With Tesla valued roughly $1.5 trillion and SpaceX valued at $2 trillion, a combination of the two firms would mark one of the largest mergers in history.
• That line of business has become the most profitable part of SpaceX, bringing in $7.5bn according to the latest quarterly results.
• Shares of Tesla, which reports its own quarterly results on Wednesday, rose 2% after being down slightly for weeks.
• Last year, a majority of investors in Tesla approved a compensation package for Musk valued around $1 trillion.

"Do I think it would be a good idea? Yes, " Musk remarked during a call with financial analysts over the quarterly business results of SpaceX on Tuesday.

While Musk observed the certainty of such a merger should not be assumed, and it would need shareholders' backing, he noted special committees within both businesses have been formed to examine the move.

"The special committees have not reached agreement on terms of any transaction and there's no guarantee that they will, " Musk continued. "But I do think there is a lot of merit to merging and a lot to be gained."

With Tesla valued roughly $1.5 trillion and SpaceX valued at $2 trillion, a combination of the two firms would mark one of the largest mergers in history. Shares of SpaceX rose 8% in after hours trading.

For context, the firm, which builds space rockets and Starlink internet satellites, is now expanding into offering cloud compute capacity for other tech businesses, like Anthropic and Google.

That line of business has become the most profitable part of SpaceX, bringing in $7.5bn according to the latest quarterly results. Starlink additionally tallied revenue of $5.2bn.

SpaceX as a whole, nevertheless, is not profitable and has lost $1.1bn so far this year.

Over the last year, Musk has taken to bringing more of his various firms under fewer banners. Before it went public earlier this year, SpaceX acquired xAI and X, the platform formerly known as Twitter, both of which Musk owned.

Notably, the recent launch of Terafab, a combined effort to manufacture computer chips between Tesla and SpaceX, was another signal that Musk sees his firms as potentially more effective when working together.

Musk remarked on Tuesday a full merger between the two businesses would create sense for the work each is doing around chips, artificial intelligence, software and more.

Musk, who became the world's first paper trillionaire after the SpaceX stock market debut earlier this year, remarked he is not included in either of the special committees considering the mega-merger.

He described himself as a "conflicted party" as the chief executive of Tesla and of SpaceX.

Even commenting on the possibility of a merger between the two firms, Musk compared to "tap dancing through a minefield".

He continued a merger would ultimately be decided by shareholders. At least 50% of Tesla's shareholders would need to approve the merger. It musk described as "quite a high hurdle to achieve".

Shareholders have backed Musk's desires before. Last year, a majority of investors in Tesla approved a compensation package for Musk valued around $1 trillion.

While Tesla is known as an electric car firm, Musk has lately been shifting resources there to work around robotics.

SpaceX, with its growing focus on AI infrastructure, rapidly outstripped Tesla on the stock market in terms of value when it produced its stock market debut.

In short, elon Musk says Tesla is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.