Elon Musk said on Tuesday that Tesla and SpaceX are actively considering a merger, with special committees at both companies formed to examine the proposal. Musk called it "a good idea" but cautioned that no agreement has been reached and the move would require shareholder approval. He noted he is excluded from the deliberations as a "conflicted party" leading both companies.
A combined entity would rank among the largest mergers in history. Tesla carries a valuation of roughly 1.5 trillion dollars. SpaceX is valued at 2 trillion dollars. Musk told financial analysts on a SpaceX quarterly earnings call that a merger would make sense given overlapping work in chips, artificial intelligence and software.
SpaceX's cloud compute business generated 7.5 billion dollars in revenue in the latest quarter, its most profitable line of work. Starlink contributed 5.2 billion dollars. SpaceX as a whole lost 1.1 billion dollars so far this year. Tesla shares rose 2 percent following the announcement. SpaceX shares gained 8 percent in after-hours trading.
Musk described the prospect of commenting publicly on a merger as "tap dancing through a minefield." He noted that Tesla shareholders would need to approve any deal, a threshold he called "quite a high hurdle to achieve" since at least 50 percent must vote in favor. Shareholders supported a 1 trillion dollar compensation package for Musk at Tesla last year.
Musk has consolidated his business interests over the past year. SpaceX acquired xAI and X, the platform formerly known as Twitter, both Musk-owned firms. In recent months, Tesla and SpaceX launched Terafab, a joint chip manufacturing effort. Musk has shifted Tesla resources toward robotics while SpaceX expands its AI infrastructure offerings to companies including Anthropic and Google.