Elon Musk confirmed Tuesday that a full merger between Tesla and SpaceX is under active consideration. Special committees at both firms have been formed to evaluate the move, which would combine two of the world’s most valuable companies.
The potential deal would create a corporate giant valued at roughly $3.5 trillion. It represents a massive consolidation of Musk’s empire, merging electric vehicles and robotics with space launch and satellite internet.
Committees at Work
“Do I think it would be a good idea? Yes,” Musk told financial analysts during a call reviewing SpaceX’s quarterly results. He emphasized that no terms have been agreed upon yet. “There’s no guarantee that they will,” he added. However, he argued there is significant merit in combining the two entities. SpaceX shares jumped 8% in after-hours trading following the announcement, while Tesla stock rose 2% ahead of its own earnings report on Wednesday.
Profitable Cloud, Losses Elsewhere
SpaceX’s financials show a mixed bag. The company’s new cloud compute division, serving clients like Anthropic and Google, generated $7.5bn in revenue, making it the most profitable segment. Starlink added another $5.2bn. Yet, SpaceX as a whole lost $1.1bn this year. Musk noted that a merger makes sense for their shared work on chips, AI, and software, pointing to the recent Terafab chip manufacturing initiative as a precursor to deeper integration.
Shareholder Hurdle
Musk, who became the first paper trillionaire earlier this year, recused himself from the merger talks. He called himself a “conflicted party” and described navigating the process as “tap dancing through a minefield.” The deal faces a steep climb: at least 50% of Tesla shareholders must approve it. While investors backed Musk’s $1 trillion pay package last year, this hurdle remains high. The final decision rests entirely with the investors, not the CEO.
Source: BBC Technology
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