Musk Backs SpaceX-Tesla Merger as Committees Form
Elon Musk says SpaceX and Tesla have formed special committees to explore a merger, calling it a good idea but not a certainty. Tesla shares rose on the news.
Elon Musk says the boards of SpaceX and Tesla have each formed special committees of independent directors to explore a possible merger of his two biggest companies. Musk revealed the news during SpaceX's third-quarter earnings call on Tuesday, calling the idea one with "a lot of merit" while warning investors that a deal is far from certain.
Special committees at both companies
The committees were formed at the request of shareholders, Musk said. Each committee is made up of independent directors, because Musk - the CEO and largest individual shareholder of both companies - cannot take part in the talks himself. "Because I'm a conflicted party, I can't actually be in the discussions of the special committees, so it's this sort of a ... it's an odd kabuki dance where two groups of people are talking, and I can't be in the conversation," Musk told investors on the call. Musk said the committees have not reached agreement on the terms of any transaction, and there is no guarantee they ever will. "Some people out there assume that a SpaceX and Tesla merger is a certainty, and I think that would be overstating it," he said.
A $3 trillion question for shareholders
A combined SpaceX-Tesla would create a corporate giant worth more than $3 trillion, spanning rockets, electric cars, satellites and AI. Any deal would still need to clear a tough shareholder vote: on the Tesla side, approval would require a 50 percent vote of all outstanding shares - not just the shares that vote - a hurdle Musk himself called "quite a high hurdle." Markets liked the news anyway. Tesla shares climbed nearly 2 percent in extended trading, while SpaceX shares rose nearly 5 percent after its earnings report beat Wall Street expectations.
Why now: the AI connection
Musk pointed to the growing overlap between the two companies, especially in artificial intelligence. SpaceX's AI business became its largest revenue segment in the third quarter, and the two firms already cooperate on AI software, chip design, the Tesla-SpaceX Terafab semiconductor project, robotics and Starlink satellite connectivity. SpaceX reported net income of $4.4 billion on $14.6 billion in revenue for the quarter, up 161 percent from a year ago - well ahead of analyst forecasts of $1.57 billion in net income and $12.9 billion in revenue. The merger talk also comes eight months after SpaceX acquired Musk's AI company xAI in February, folding Grok and the social platform X into the rocket company. Whether the two committees can agree on terms remains the open question. But Musk's public backing makes the long-rumored deal feel closer than ever.
Sources
- TechCrunch - https://techcrunch.com/2026/10/20/spacex-and-tesla-boards-form-special-committees-to-review-merger/ - CNN - https://www.cnn.com/2026/10/20/business/spacex-tesla-merger-musk?cid=external-feeds_iluminar_meta - MarketWatch - https://www.marketwatch.com/story/teslas-stock-rises-as-elon-musk-drops-new-clues-about-a-possible-spacex-merger-8cc44fc2