Musk confirms SpaceX and Tesla form merger committees
Elon Musk says merging SpaceX and Tesla is "a good idea" and that both companies have formed special committees to discuss a deal. SpaceX reported its first profit as a public company, driven by a surge in AI-related revenue.
Elon Musk said on Tuesday that a merger of his two companies SpaceX and Tesla would be “a good idea” and that they had formed special committees to discuss a union, sending shares of the space and technology company up 8 per cent in extended trading.
The company earlier posted its first profit as a public company and Musk said he expected annual recurring revenue of between US$500 billion (HK$3.9 trillion) and US$1 trillion by the end of 2027, as demand for its data-centre space surges thanks to the AI boom.
“I think it would be a good idea, but it’s really up to the special committees of both companies,” Musk said in the first official confirmation that the companies were formally talking. “Because I’m a conflicted party, I can’t actually be in the discussions of the special committees,” which comprised independent directors, he told investors on a conference call. The companies had formed the special committees at the request of shareholders, who ultimately would need to approve a deal, he added.
“I do think there’s a lot of merit to combining the companies as we are pretty much in the superintelligence singularity, and there’s a lot to be gained from cooperating on developing superintelligence software, chip design, the Terafab obviously, robotics, mass-to-orbit with the Starmind constellation, connectivity,” he said. Terafab, the chip manufacturing joint venture between the two companies, should produce its first test chip around May or June of next year and aims to reach volume production by the third quarter of 2028, Musk said on the call. Musk added that it would be premature to assume a SpaceX-Tesla merger would happen, noting that the special committees had not agreed on transaction terms and may never do so. Tesla shares rose 1.8 per cent in extended trading.
The world’s richest person, Musk owns nearly a fifth of Tesla and just under half of SpaceX, and analysts have said a merger would give him control of the combined entity. The talks started in recent weeks and could result in SpaceX acquiring Tesla, a person familiar with the matter told Reuters, who declined to be named because they were not authorised to talk to media. Tesla has been working with an investment bank to advise on the discussions, the person said.
SpaceX’s revenue climbed 161 per cent to US$14.58 billion for the three months ended 30 September from a year earlier. AI revenue surged by almost 10 times to US$7.56 billion, mostly from renting out data-centre capacity to developers such as Anthropic, Alphabet’s Google and Reflection AI rather than from its own models. The third quarter offered the clearest evidence yet that SpaceX’s heavy investment in AI is translating into revenue, even as spending on compute infrastructure remains enormous — capital expenses nearly tripled to US$19.6 billion.