Musk Confirms SpaceX and Tesla Have Begun Merger Talks

Elon Musk confirmed on SpaceX's third-quarter earnings call that the company and Tesla have formed special committees to explore a potential merger. Musk said he would not take part in the committee discussions because he is an interested party, though he personally believes a merger would be a good idea. No agreement has been reached yet, and any deal would still require approval from shareholders of both companies, with Tesla requiring support from a majority of all shareholders, not just those who vote.

This is the first time Musk has officially confirmed that the two companies are taking action toward a merger. Analysts see the deal as likely, with Dan Ives putting the probability above 80% and Gene Munster estimating a 95% chance within the next two years.

Both companies have significant AI operations. SpaceX houses xAI and reported a roughly ninefold revenue jump in its AI business to $7.56 billion this quarter, largely driven by renting out AI computing capacity. Tesla runs its physical AI business spanning autonomous driving and Optimus robots. The two are also jointly developing the Terafab chip project in Texas, which is intended to produce AI chips for terrestrial and space-based use.