American billionaire Elon Musk owns several multi-billion dollar enterprises, including SpaceX, Tesla, the social media platform X, and Neuralink. Tesla, an electric vehicle manufacturer, is one of his two major companies. The other is SpaceX—a firm focused on space exploration, satellite services, and the satellite internet service, Starlink. While these two entities currently operate independently, could they be headed for a merger? Elon Musk himself has fueled this speculation, stating on Tuesday that merging SpaceX and Tesla could be a “good idea.” He noted that special committees have been formed to discuss a potential merger. Following his comments, the value of SpaceX shares rose by 8%, as reported by the news agency Reuters.
Driven by the expansion of artificial intelligence (AI), the demand for data centers is surging. Consequently, Musk anticipates that the company’s annual revenue could reach between $500 billion and $1 trillion by the end of 2027. Notably, the company has also achieved profitability for the first time as a public entity.
Musk has previously floated the idea of merging the two companies, pointing to their growing synergies. Speculation regarding a potential acquisition of the electric vehicle manufacturer by SpaceX has intensified recently; last week, Barclays suggested that an announcement could be made before Tesla’s annual general meeting in December.
Confirming that the two companies have entered into formal discussions, Musk remarked that while a merger could be a “good idea,” the outcome rests with the special committees established by each firm. As he is a party to the potential deal, Musk is not participating in the deliberations of these committees, which are composed of independent directors. These committees were formed at the request of the shareholders, and ultimately, it is they who must approve the deal.
Musk stated that there is a strong rationale for merging the two companies. Significant advantages could be gained by collaborating in areas such as superintelligence software, chip design, TeraFab, robotics, and the StarMind constellation. TeraFab—a joint venture between the two companies focused on chip manufacturing—is set to produce its first test chip around May or June of next year, with a target to reach mass production by the third quarter of 2028.
However, Musk noted that it would be premature to confirm a merger between SpaceX and Tesla at this stage. The special committees have yet to reach an agreement on the terms of the deal, and it is possible that they may never do so. Musk, the world’s wealthiest individual, owns approximately one-fifth of Tesla and slightly less than half of SpaceX. Analysts suggest that, should a merger occur, Musk would retain control of the new entity. These discussions began in recent weeks. A source, speaking on condition of anonymity, told Reuters that SpaceX could potentially acquire Tesla. Tesla is currently working with an investment bank regarding these discussions.
Source: Reuters
