Could SpaceX and Tesla Merge? Musk Announces Both Have Formed Special Committees to Formally Assess a Merger!

A potential SpaceX-Tesla transaction has moved beyond market speculation to formal evaluation, though its terms remain undecided. During SpaceX’s quarterly earnings webcast on Tuesday, Musk disclosed that the two companies had set up special committees to begin examining a possible deal, marking an important step in the process.

A merger could potentially become the largest corporate combination in history, given that both businesses are among the world’s most valuable. SpaceX’s current valuation is approximately $2 trillion, and Tesla’s market capitalisation is close to $1.5 trillion. Adding those valuations would give the combined business a value of approximately $3.5 trillion if a merger ultimately goes ahead.

Combining the businesses would unlock significant value, Musk said during the webcast, highlighting substantial benefits from developing superintelligence software together. As chief executive officer of both companies, however, he said his conflict of interest would keep him out of the special committees’ deliberations. A final deal remains a distant prospect, with the two committees yet to settle on transaction terms.

Shared artificial intelligence ambitions are a major reason the companies are examining integration. By bringing superintelligence software together with operations across chips, robotics, autonomous vehicles and satellite internet, Musk hopes collaboration between these fields will generate greater technological and commercial value.

Completion of a merger would place SpaceX’s rocket launch and satellite internet operations in the same company as Tesla’s electric vehicle, energy and robotics businesses. Coordinated investment in areas including AI infrastructure and data centres could also become possible for the two businesses.

Investors should not regard the merger as certain, Musk explicitly warned. Among the main obstacles is shareholder approval: Tesla would require backing from shareholders representing 50% of all shares, not just a simple majority of the shares voted. Consequently, approval could remain out of reach even if most shareholders who cast a vote support the proposal.

With specific terms still unresolved, the special committees continue to assess a possible transaction. The outcome of their evaluations, the deal structure and shareholders’ views will determine whether a combination potentially valued at approximately $3.5 trillion eventually takes shape.

What Business Links Already Connect SpaceX and Tesla?

Existing commercial relationships offer a foundation for closer integration between SpaceX and Tesla. Alongside shared investors, the businesses have some personnel serving in roles at both companies. SpaceX has previously bought Tesla Cybertrucks worth more than $100 million, while Musk’s AI company, xAI, is a major buyer of Tesla’s large-scale energy storage batteries.