
Elon Musk confirms talks to merge Tesla and SpaceX
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Elon Musk is the top executive of both Tesla and SpaceX Elon Musk has said he is actively considering merging Tesla and SpaceX, his two biggest companies.
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"Do I think it would be a good idea?
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Yes," Musk said during a call with financial analysts over the quarterly business results of SpaceX on Tuesday. While Musk noted the certainty of such a merger should not be assumed, and it would need shareholders' support, he said special committees within both companies have been formed to examine the move.
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"The special committees have not reached agreement on terms of any transaction and there's no guarantee that they will," Musk added.
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"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 companies would mark one of the largest mergers in history.
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Shares of SpaceX rose 8% in after hours trading.
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The company, which builds space rockets and Starlink internet satellites, is now expanding into offering cloud compute capacity for other tech companies, like Anthropic and Google.
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That line of business has become the most profitable part of SpaceX, bringing in $7.5bn according to the latest quarterly results.
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Starlink also tallied revenue of $5.2bn. Why does Elon Musk want to merge Tesla and SpaceX?
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SpaceX as a whole, however, is not profitable and has lost $1.1bn so far this year.
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Shares of Tesla, which reports its own quarterly results on Wednesday, rose 2% after being down slightly for weeks.
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Over the last year, Musk has taken to bringing more of his various companies under fewer banners.
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Before it went public earlier this year, SpaceX acquired xAI and X, the platform formerly known as Twitter, both of which Musk owned. The recent launch of Terafab, a combined effort to manufacture computer chips between Tesla and SpaceX, was another signal that Musk sees his companies as potentially more effective when working together.
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Musk said on Tuesday a full merger between the two companies would make sense for the work each is doing around chips, artificial intelligence, software and more.
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Musk, who became the world's first paper trillionaire after the SpaceX stock market debut earlier this year, said he is not included in either of the special committees considering the mega-merger.
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He described himself as a "conflicted party" as the chief executive of Tesla and of SpaceX.
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Even commenting on the possibility of a merger between the two companies, Musk compared to "tap dancing through a minefield".
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He added a merger would ultimately be decided by shareholders.
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At least 50% of Tesla's shareholders would need to approve the merger, which Musk described as "quite a high hurdle to achieve". Shareholders have supported Musk's desires before.
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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 company, Musk has lately been shifting resources there to work around robotics.
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SpaceX, with its growing focus on AI infrastructure, quickly outstripped Tesla on the stock market in terms of value when it made its stock market debut.
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Musk and Anthropic pledge public share giveaways SpaceX shares sink after first earnings report reveals huge AI spending plans
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