Report: Musk Pushes for SpaceX-Tesla Merger, Aiming to Announce in First Half of 2027

Musk is pushing full force to complete the largest corporate merger in history between his two most valuable companies—SpaceX and Tesla—and the time window he has set for the deal is rapidly narrowing.

According to a Bloomberg report on October 22, people familiar with the matter said Musk and his team of advisers are aiming to announce the deal in the first half of 2027 to ensure the merger closes during Trump's current term. The combined company would have a market value of about $3.7 trillion, surpassing any corporate acquisition in history. In the first of two consecutive earnings calls, Musk himself publicly and explicitly backed the merger for the first time, calling it "a good idea," but said he would recuse himself from specific negotiations and leave the details to a special committee.

The urgency of the time window stems from multiple pressures. With less than two weeks until the U.S. midterm elections, if Democrats win back either chamber of Congress, Musk's business empire will face the risk of congressional investigations, and Trump will also rapidly enter lame-duck status. At the same time, market sentiment in the chip and artificial intelligence sectors is becoming volatile, and any pullback in valuations would directly weaken investor enthusiasm underpinning this mega-deal. Bill Birmingham, head of research at REX Financial, said:

"Musk and his advisers clearly want to seize this window—the timing is both favorable and crucial."

Musk's public endorsement; deal framework begins to take shape

Musk's statement this time is his clearest public endorsement to date, though his style remains casual. On the earnings call, he called the merger "a good idea" and said he would let a special committee handle the details while choosing to stay out of it himself. He also warned that persuading Tesla shareholders could be difficult, and the two committees have not yet agreed on terms.

According to the report, people familiar with the matter said the pace of the deal depends on when Tesla's board is satisfied with the details of the proposal. On the SpaceX side, the hurdle of shareholder approval is relatively small—Musk controls more than 80% of the voting power. Tesla's situation is more complicated: Musk holds only about 20% of the shares, but the company's board and shareholder base approved a pay package worth more than $1 trillion for the CEO less than a year ago, a precedent that may provide some shareholder foundation for this merger.

Before his formal statement, Musk had already paved the way for the merger through a series of less direct but highly suggestive moves. On October 15, Tesla unveiled a Roadster prototype jointly designed with SpaceX, equipped with gas thrusters that can drive up an inverted ramp and complete a flip—a move rich in symbolism.

Business synergies between SpaceX and Tesla have long exceeded outside perception. The two companies' most representative joint project is Terafab, a semiconductor plant they are building together in Texas, and behind the scenes, their integration around artificial intelligence is accelerating.

According to the report, people familiar with the matter said that during SpaceX's acquisition of AI startup Cursor, some Cursor employees met with Tesla employees to discuss the possibility of using the Grok 4.5 model.

After that, Tesla internally pushed engineers to switch from Anthropic's Claude to Grok 4.5, Grok Bot and other Musk-affiliated products for programming work.

At the product-testing level, Musk is also blurring the boundaries between the two companies. Around June this year, he gave Tesla employees early access to the X Money digital payments app and offered a $100 incentive to encourage them to try it. In addition, SpaceX and Tesla are also collaborating on developing robotic AI capabilities.

From a fundamental perspective, the merger of the two companies has an inherent logic of complementarity. Andrew Rocco, an equity strategist at Zacks Investment Research, said:

"Tesla has grown into a company with slower growth but abundant cash and a strong balance sheet, while SpaceX is an ultra-fast-growing enterprise facing enormous capital expenditure pressure as it expands Starlink and Starship. A merger of the two would create a perfect complementary combination."

According to Bloomberg's Billionaires Index, if Musk can overcome the above challenges and complete the merger, the deal will add more than $110 billion to his personal wealth.

Share price and political window: dual time pressure

The urgency of Musk's push for the merger partly stems from the periodic strength of SpaceX's share price. SpaceX went public in June this year, making Musk the world's first trillionaire. Although the stock has fluctuated since then, it has rebounded 47% since August 5. Nicolas Owens, an analyst at Morningstar, noted:

"Now is a good time to use this stock as acquisition currency. If SpaceX's share price falls, it will complicate reaching an acquisition agreement."

SpaceX and Tesla themselves also face this challenge: the two companies are expected to burn billions of dollars in cash each quarter for the foreseeable future, a significant shift in financial model for Tesla's electric vehicle business, which has consistently generated steady cash flow in recent years.

On the political front, Musk is spending heavily to maintain a favorable political ecosystem. In this midterm election cycle, he has invested about $369 million in total, including more than $250 million since the summer alone toward efforts to keep Congress under Republican control, with a large share of the funds flowing to Texas—where SpaceX has major facilities and where a Senate seat is competitive.

The challenges facing the merger come not only from the market but also from complex regulatory and geopolitical factors. Rajat Gupta, an analyst at JPMorgan, said in a research report that the national security sensitivity of SpaceX's U.S. government and defense contracts will pose major obstacles in securing regulatory and shareholder approval.

According to the report, SpaceX's embedding in the U.S. defense system has reached a level rarely seen in modern corporate history. Its rocket launch capabilities, orbital hardware and close ties with government officials have helped it secure Pentagon contracts tailored specifically for it. This year alone, SpaceX won a $2 billion contract to provide military communications network satellites for the "Golden Dome" missile defense program, whose final total investment could exceed $1 trillion. Risk disclosure and disclaimer

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