Elon Musk confirms he is considering merging Tesla and SpaceX
Special committees formed to examine potential combination of the two companies
Quick Look
- Elon Musk announced he is actively considering merging Tesla and SpaceX, with special committees formed to examine the potential combination.
- Such a merger would create one of the largest corporate deals in history, valued with Tesla at $1.5 trillion and SpaceX at $2 trillion.
AI-generated summary
Why It Matters
Elon Musk owns multiple major companies and has recently brought xAI and X under the SpaceX banner before it went public.
Elon Musk has said he is actively considering merging Tesla and SpaceX, his two biggest companies.
"Do I think it would be a good idea? 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.
"The special committees have not reached agreement on terms of any transaction and there's no guarantee that they will," Musk added. "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.
Shares of SpaceX rose 8% in after hours trading.
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.
That line of business has become the most profitable part of SpaceX, bringing in $7.5bn according to the latest quarterly results. Starlink also tallied revenue of $5.2bn.
SpaceX as a whole, however, is not profitable and has lost $1.1bn so far this year.
Shares of Tesla, which reports its own quarterly results on Wednesday, rose 2% after being down slightly for weeks.
Over the last year, Musk has taken to bringing more of his various companies 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.
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.
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.
What to Watch
AI outlook — possibilities, not facts
Special committees will examine the merger terms
Very likely · Within months
Open Questions
- What would the exact terms and structure of the merger be?
- Will shareholders approve the proposed combination?
