Musk Says SpaceX and Tesla Are Exploring a Merger That Could Top $5 Trillion
Both companies have formed special committees of independent directors to study a combination, Musk said on SpaceX's earnings call, while cautioning that a deal is far from certain.
Elon Musk said Tuesday that SpaceX and Tesla are exploring a merger, a combination one Wall Street analyst says could be worth nearly $5 trillion and would be the largest deal in corporate history. Musk made the disclosure on SpaceX's earnings call.
He said both companies have formed special committees made up of independent directors to study the idea at shareholders' request. Musk said he sees "a lot of merit to combining the companies," but warned that nothing is settled. Treating a merger as a certainty, he said, "would be overstating it."
Markets reacted quickly. In morning trading, Tesla rose $14.01, or 3.8%, to $387.72, and SpaceX rose $14.62, or 9.9%, to $162.41. SpaceX is valued at about $1.98 trillion and Tesla has a market capitalization of about $1.5 trillion. For scale, Nvidia sits at $5.2 trillion and Apple at $4.95 trillion.
Musk framed the logic around artificial intelligence, which he called "super intelligence." He pointed to cooperation on AI software, chip design, the Terafab chip project, robotics, and launching mass to orbit through the "Starmind" constellation. SpaceX owns xAI, the company behind the Grok chatbot, and the planned Terafab factory would make semiconductors for both SpaceX and Tesla.
Tesla has been moving away from traditional vehicles. In January, Musk said it would phase out the Model S and Model X, with the focus shifting to autonomous products such as self-driving taxis and humanoid robots. Musk said Tesla will eventually produce 1 million humanoid robots a year, and that the Optimus robot could reach the market in 2027.
The biggest hurdle is Tesla's own shareholders. Musk said approval would require "a 50% vote of all shares, not just those who vote," which he called "quite a high hurdle."
Dan Ives of Yorkville Ives & Co. told CBS News the deal makes sense for a number of "strategic AI and data-driven reasons" and called it "the right move for Musk." He said Tesla shareholders would likely demand a premium and estimated a Tesla share price in the "$500/$550 per share range" would be needed to win their approval. Ives put the odds of a merger happening by the end of 2027 at 80% to 90%.
The deal would join two companies whose fortunes already overlap through Musk. SpaceX absorbed xAI, so a combination would bring the Grok chatbot, the rocket and satellite business, the self-driving and robotics work, and the planned chip factory under one roof. That is the AI-first argument Musk made on the call.
Musk's warning about the shareholder vote is also notable. Requiring a majority of all outstanding shares, rather than a majority of those who show up and vote, means shareholders who simply do not vote count against the deal.
Neither company's board has announced a vote, and the coverage so far includes no statements from regulators.
