Tesla and SpaceX in talks over a $3.5 trillion merger
Independent directors of Tesla and SpaceX have formed a special committee to discuss a possible merger of the two companies, and Musk said the two sides have not reached any agreement on the terms of a deal. The combined entity would have a market value of about $3.5 trillion, with SpaceX at about $2 trillion and Tesla at nearly $1.5 trillion, and Musk would hold about one-third. Musk mentioned that the two sides could collaborate on AI software, chip design, robotics, connectivity technology, and the jointly built Terafab chip factory; SpaceX this week reported its first operating profit since going public, with third-quarter revenue up 161% to $14.58 billion, and AI business revenue nearly tripling from the second-quarter level to $7.56 billion, surpassing Starlink's $5.25 billion for the first time.
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The original report discloses that independent directors of both companies have formed a special committee, and provides the post-merger market value of about $3.5 trillion and the shareholding structure of both parties.
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THE BIG STORY
Tesla and SpaceX weigh a $3.5 trillion merger
Tesla CEO Elon Musk in Oakland, California, on Wednesday, April 29, 2026.David Paul Morris/Bloomberg/Getty Images
It’s official: Tesla and SpaceX are in talks. Independent board members at the two Elon Musk-led companies have formed special committees to hash over a possible merger, Musk told investors this week.
“These special committees consist of independent directors, and because I’m a conflicted party, I can’t actually be in the discussions of the special committees,” said Musk. “This is definitely the kind of question where I feel like I’m tap dancing through a minefield.”
Tesla stock rose just over 1% in the wake of the news, while SpaceX rose above 5%.
Musk said the committees haven’t reached any kind of agreement on the terms of a potential transaction, and there’s no guarantee that they will. As the CEO of both companies, he owns roughly 20% stake in Tesla and 45% of SpaceX—and wields control over about 82% of the voting power at the latter.
Musk has made clear he believes a tie-up would be a fine idea. He cited collaboration on AI software, chip design, robotics, and connectivity, plus the planned Terafab chip plant, which is a colossal manufacturing complex being developed by SpaceX and Tesla jointly.
A combined Tesla-SpaceX would have a total market value of about $3.5 trillion, with SpaceX at about $2 trillion and Tesla at nearly $1.5 trillion. Musk would own about a third of the combined entity. The companies are already financially entangled, including a $2 billion investment by Tesla in SpaceX.
There are also areas of overlap between the Tesla and SpaceX boards in Ira Ehrenpreis, founder of venture capital firm DBL Partners, and Tesla board member James Murdoch, who testified in a legal setting that he had previously invested in SpaceX.
SpaceX this week reported its first operating profit since its June IPO. Revenues for its third quarter rose 161% to $14.58 billion, well above the $12.86 billion analysts expected. Operating revenue came in at $2.79 billion; net income was $4.4 billion.
Revenue from the company’s AI business nearly tripled from the second quarter to $7.56 billion, surpassing Starlink’s $5.25 billion for the first time since the company went public. —Amanda Gerut
THE BLIND BOX
“We consider this one of the most impactful security issues in recent memory.”
THE RUNDOWN
—Meta revenue surges to $64.6 billion, but billions in settlements and skyrocketing AI spending are hurting profit and cash flow.
—Electronic Arts will reportedly cut 400 jobs, or 3% of its total staff, and shut down BioWare.
—Anthropic adds Harvard astrophysicist Chris Stubbs to the trust that controls its board.
—Alphabet and Microsoft opt out of tokenized stocks, a blow to plans by OKX and the owner of the New York Stock Exchange.
—A look at Space42’s $1.7 billion bid to go beyond the UAE to conquer new markets.
—Apple’s iPhone Duo, reviewed: A “hand warmer” for early adopters that’s exciting, expensive, and in dire need of better app support.
—Spotify debuts its first native in-car app, available on select Audi models.
—New Mexico wins a $25 billion judgment over Facebook privacy violations.
THE PARTING SHOT
The AI boom is almost $5 trillion short of paying for itself, according to Gartner’s latest estimates.
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