Elon Musk confirmed for the first time that SpaceX and Tesla are holding formal talks about a possible merger. According to the billionaire, the merger of the space and car company would be a “good idea”, but the decision is in the hands of special committees of independent directors.
“I think it would be a good idea, but it actually depends on the special committees of the two companies”, Musk said during a call with investors. He specified that due to his own conflict of interest, he could not participate in the committee discussions.
The two companies created the special bodies at the request of shareholders, who ultimately must also approve the possible deal. Musk stressed that it is too early to assume that the merger will necessarily happen, as the terms have not yet been agreed and it is possible that an agreement will not be reached at all.
According to a source, Reuters has started negotiations in recent weeks and one possible scenario is for SpaceX to acquire Tesla. The car company is working with an investment bank that is advising it on the talks.
Musk sees potential benefits from combining the businesses in several areas – artificial intelligence, chip development, robotics, satellite connectivity and orbiting.
“I think there are a lot of advantages to merging the companies because we are practically at the singularity of superintelligence and there is a lot to be gained from collaborating on superintelligence software development, chip design, Terafab, obviously robotics, orbiting with the Starmind constellation and connectivity“, he said.
One of the links between the two companies is already Terafab - their joint venture for chip manufacturing. According to Musk, the first test chip should be produced around May or June 2027, and mass production is planned for the third quarter of 2028.
AI business is changing SpaceX
The merger talks come as SpaceX reports its first profit as a public company and is rapidly expanding its artificial intelligence business.
The company's revenue grew 161% year-on-year to $14.58 billion in the third quarter. AI revenue increased nearly tenfold to $7.56 billion, with the bulk coming from leasing data center capacity to developers like Anthropic, Google, and Reflection AI.
SpaceX ended the quarter with a net profit of $4.4 billion, compared to a loss of $1.1 billion a year earlier. At the same time, investments remain huge - capital expenditures have almost tripled to $19.6 billion.
Musk expects the company's annual recurring revenue to reach between $500 billion and $1 trillion. USD by the end of 2027, supported by growing demand for computing infrastructure for artificial intelligence.
Starlink now has 13.6 million subscribers
The Starlink satellite internet also continues to grow. The number of subscribers reached 13.6 million in the third quarter, above analysts' expectations of 12.19 million.
However, the service's expansion into cheaper international markets is lowering the average monthly revenue per subscriber - from 99 USD in 2023 to 69 USD in the last quarter.
An important element of the long-term plans remains Starship. The new generation of reusable rockets has not yet entered regular commercial operation, but SpaceX is counting on the system to launch a new generation of Starlink satellites and a future AI computing infrastructure into orbit.
A possible merger of SpaceX and Tesla would bring together a significant part of Musk's businesses in space technology, electric vehicles, robotics, artificial intelligence and chip manufacturing under one corporate structure. Musk himself owns about a fifth of Tesla and just under half of SpaceX.
The news of the official talks was met positively by investors. SpaceX shares rose 8% in after-hours trading, while Tesla shares rose 1.8%.