Elon Musk confirmed on Tuesday that SpaceX and Tesla have established independent committees to examine a potential merger between the two companies. The announcement pushed SpaceX shares up 8% in after-hours trading, and coincided with SpaceX publishing its first profitable quarterly report as a public company.
At a shareholder briefing, Musk called the merger idea a good one, but said he would not personally participate in deliberations of the independent director committees to avoid conflicts of interest. The committees were created at shareholders' request, and any transaction would ultimately require shareholder approval.
Musk cautioned that it is premature to assume a deal will materialize: the parties have not agreed on terms, and may not reach an agreement.
Size and scope of the proposed combined company
According to the statements, a merger could form a conglomerate with an estimated market value of about $3.5 trillion. The combined group's activities would span electric vehicles and energy storage, satellite internet and launches, and artificial intelligence, among other areas.
Musk argued there is growing overlap between the two companies' operations — from AI software development and chip design to robotics and space-based data centers — creating potential synergies.
SpaceX quarterly results: AI drives revenue surge
SpaceX's third-quarter results underline the company’s transformation. Revenue rose 161% year-over-year to $14.58 billion, with AI-related revenue increasing nearly tenfold to $7.56 billion. Much of that AI revenue came from leasing data-center capacity to developers such as Anthropic and Google.
Net income was $4.4 billion versus a $1.1 billion loss a year earlier, far exceeding analyst expectations. Starlink subscribers grew to 13.6 million, also beating consensus, although average monthly revenue per subscriber dropped from $99 to $69 amid international expansion.
Joint chip manufacturing: Terafab timeline
The joint semiconductor venture Terafab aims to produce its first test chip in May or June 2026, with mass production potentially starting in the third quarter of 2028. The joint venture is intended to supply chips for Tesla’s self-driving vehicles and Optimus humanoid robots, as well as SpaceX’s AI infrastructure.
Risks: national security, regulation and governance
The proposed merger raises substantial risks. SpaceX is a key supplier to the U.S. military, intelligence agencies and NASA, while Tesla’s large factory in Shanghai links it closely to China — factors likely to prompt intensified national-security reviews in Washington and Beijing.
Governance is another sensitive issue: Elon Musk owns roughly one-fifth of Tesla and nearly half of SpaceX, so a combined company would likely increase his influence over the merged entity. Analysts say shareholders will need to be convinced that a merger creates more value than the two firms independently.
Next steps
The independent committees’ reviews and any subsequent shareholder votes will determine whether talks progress. Company leadership stresses that no deal terms have been agreed, so further evaluation and decisions are needed.
Source: Reuters
(This article was prepared with assistance from an AI tool; the final content was edited and verified by our journalist.)
