Musk welcomes the merger of SpaceX and Tesla

American businessman Elon Musk said that the merger of his companies “SpaceX” and “Tesla” would be a “good idea,” and that they formed special committees to discuss the matter, which led to the shares of the space and technology company rising 8 percent, during after-hours trading.

On Tuesday, the company announced its first profits since its listing on the stock exchange. Musk said he expects annual recurring revenue of between $500 billion and $1 trillion by the end of 2027, with demand for its data center space rising thanks to the boom in artificial intelligence.

In the past, Musk had interested shareholders in the idea of ​​merging SpaceX and Tesla, indicating increasing overlap between them. Speculation about the aerospace company's acquisition of the electric car maker has gained momentum recently, with Barclays Bank indicating last week that a deal may be announced before Tesla's annual meeting next December.

“I think it would be a good idea,” Musk said, in the first official confirmation that the two companies were holding talks, “but the decision, in fact, is up to the special committees of the two companies.”

Addressing investors, he added during a conference call: “Because I am a party with conflicting interests, I cannot actually participate in the discussions of the special committees,” which consist of independent board members.

He noted that the two companies formed special committees at the request of shareholders, who will ultimately have to approve a deal.

He continued: “I truly believe that there are great benefits from merging the two companies, as we are very close to the point of exclusivity in superintelligence, and there is a lot that can be achieved from cooperation in developing superintelligence software, designing chips, and of course the TerraFab project, robotics, launching objects from Earth into orbit using the Starmind constellation project, and communication.”

During the call, Musk added that TerraFab, the joint chip manufacturing project between the two companies, is scheduled to produce its first experimental chip in May or June of next year, and aims to reach the stage of mass production by the third quarter of 2028.

Tesla shares rose 1.8 percent during after-hours trading.

Musk, the richest man in the world, owns nearly a fifth of Tesla shares and slightly less than half of SpaceX shares, and analysts say the merger will give him control over the combined entity.

Artificial intelligence revenues drive SpaceX's transformation

SpaceX announced, on Tuesday, a jump in its revenues of 161 percent, reaching $14.58 billion, during the third quarter, compared to the same period last year.

Artificial intelligence revenues jumped nearly 10-fold to $7.56 billion, and came mostly from leasing data center capacity to developers such as Anthropic, Google and Reflection AI, rather than from its own models.

The third quarter provided the clearest evidence yet that SpaceX's massive investments in artificial intelligence are turning into revenue, even as massive spending on computing infrastructure continues, as capital expenditures nearly tripled to $19.6 billion.

The company's work in the field of artificial intelligence extends to the Grok model, the social media platform X, and rapidly growing data center operations. These businesses achieved profits in the third quarter, compared to a loss in the same period last year.

SpaceX recorded a net income of $4.4 billion, compared to a net loss of $1.1 billion a year ago. Analysts' expectations indicated a profit of $1.57 billion.

The number of Starlink subscribers exceeds expectations

The satellite Internet unit has continued to expand its subscriber base, supported by the launch of additional satellites and a growing range of services for consumers, businesses, aviation, maritime and government agencies.

The number of Starlink subscribers reached 13.6 million in the third quarter, exceeding analysts’ expectations of 12.19 million subscribers, but this growth comes at a price, as the average monthly revenue per subscriber decreased from $99 in 2023 to $69 during the third quarter, with the company expanding into foreign markets by offering cheaper packages.

Starship did not enter; It is SpaceX's next-generation reusable rocket system, still in commercial service. This system is expected to enable the deployment of Starlink satellites with higher bandwidth and computing infrastructure based on artificial intelligence in orbit.

The company's ability to turn Starship into a reliably reusable vehicle is key to its long-term strategy.

The space sector includes commercial launches, government missions, and Starship development, and remains a significant source of costs and uncertainty.