Elon Musk Confirms SpaceX and Tesla Are Exploring a Merger That Could Create a $3.5 Trillion Giant
Elon Musk said this week that SpaceX and Tesla have formed special committees of independent board members to study merging the two companies, a combination analysts estimate could be worth more than $3.5 trillion, larger than the $1.25 trillion tie-up between SpaceX and xAI completed in February. Musk told investors on SpaceX's earnings call that he sees "a lot of merit" in combining the firms, while cautioning that nothing is final since any deal would require approval from a majority of Tesla shareholders.
The pitch centers on artificial intelligence. SpaceX and Tesla already collaborate on the thrusters used in the new Tesla Roadster and on Terafab, a jointly developed AI chip plant in Texas. Musk argues that SpaceX's satellite network, rockets, and planned orbital data centers could pair with Tesla's electric vehicles, batteries, and Optimus robots to support what he calls "super intelligence." According to Bloomberg, people familiar with the discussions say Musk wants the deal completed while Donald Trump is still president. Musk currently holds about 48% of SpaceX's voting power through special shares but only around 20% of Tesla's.
The timing follows uneven results at both companies. Tesla's third-quarter net profit fell 43% to $787 million on flat revenue of $28 billion as deliveries slipped 2%, while SpaceX reported 161% revenue growth over the same period. Wall Street analyst Dan Ives told CBS News he puts the odds of a completed merger by the end of 2027 at 80% to 90%.
What supporters say:
Combining the companies could let Tesla tap SpaceX's satellite, AI, and manufacturing advances to accelerate robotics and self-driving development.
Folding a fast-growing SpaceX into a Tesla facing falling profits could offset weaker auto earnings with SpaceX's stronger revenue growth.
A single company avoids the disclosure and lawsuit risk that comes with the related-party deals the two firms already share, such as Terafab.
What critics say:
Musk would gain outsized control of a combined company without meaningfully increasing his roughly 20% Tesla stake through normal means, raising conflict-of-interest concerns for minority shareholders.
Tesla investors could end up funding speculative SpaceX projects, like orbital data centers, that have nothing to do with building cars.
A deal at this scale, combining a public automaker with a dominant rocket and satellite company, would face untested antitrust and regulatory questions.
Reports that Musk wants the merger finalized before the end of Trump's presidential term raise questions about whether political timing, not just business logic, is shaping the deal.
What's your take?
Should Tesla shareholders approve a merger with SpaceX? Yes 
No 
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Sources:
#Tesla #SpaceX #ElonMusk #Mergers #AI
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Whether this makes sense really comes down to the exchange ratio Tesla shareholders get offered. A fair valuation and this could work out fine. A lowball number dressed up as synergy, and it's just a wealth transfer.