Tesla and SpaceX form committees to weigh a merger, Musk says
Independent committees at Tesla and SpaceX are exploring a merger. Musk backs it but says nothing is agreed, as SpaceX posts a $4.4B Q3 profit.
The skim
- Tesla and SpaceX have each formed special committees of independent directors to explore a possible merger, Elon Musk said on SpaceX's earnings call Tuesday.
- Musk called the idea "a good idea" but stressed nothing is agreed, and that Tesla would need approval from a majority of all its shares.
- On the same call, SpaceX reported $14.6 billion in third-quarter revenue and $4.4 billion in net income, driven largely by its AI business.
What Musk said
Speaking on SpaceX's third-quarter earnings call on October 20, Musk said both companies set up special committees at shareholders' request to discuss combining, The Verge reports. As CEO of both, he's a conflicted party, so he says he isn't on either committee and isn't part of the talks.
No terms have been agreed and there's no guarantee of a deal. Musk pointed to one big hurdle on the Tesla side: approval would require a majority of all outstanding shares, not just those that vote. Still, he said he backs the idea, arguing the two companies could share work on AI software, chip design, robotics and connectivity.
The numbers behind the pitch
The merger talk landed alongside a strong quarter for SpaceX. TechCrunch reports that the company posted $14.6 billion in third-quarter revenue and $4.4 billion in net income, a swing from a $1 billion loss a year earlier. Its renamed "Super Intelligence" segment, which covers its data centers, the Grok assistant and the recently acquired Cursor coding tool, now makes up 52% of income.
The spending is just as big. SpaceX's capital expenditures came to $19.6 billion in the quarter, and its CFO guided to $35 billion to $40 billion more in the fourth quarter as it builds out data centers and Starship. Even after the profitable quarter, TechCrunch notes, SpaceX still shows a $413 million net loss for the first nine months of the year.
Why it matters
A combination would rank among the largest corporate deals ever. The Verge puts the combined value at upwards of $3.6 trillion. Structure is the key question. Most analysts expect SpaceX, which has carried the higher valuation since its IPO, to absorb Tesla rather than the other way around. That would give SpaceX shareholders majority control and could leave some Tesla investors unhappy. Tesla owners would also be signing up for SpaceX's heavy capital spending.
The timing to watch: Barclays suggested in a client note earlier this month that a deal could be announced before Tesla's annual shareholder meeting on December 3, 2026. For now, it's two committees talking, and nothing is decided until shareholders vote.
