Elon Musk Proposes $3.5 Trillion Tesla and SpaceX Merger

CEO Elon Musk announced that Tesla, Inc. and Space Exploration Technologies Corp. (SpaceX) have formed special committees of independent directors to explore a potential merger. The proposed consolidation would combine interests in electric vehicles, rockets, satellites, and artificial intelligence into a company with an estimated market value of $3.5 trillion. Musk stated the move has merit due to synergies in chip design and superintelligent software, though he noted that viewing the deal as a certainty would be "overstating it."

Any agreement requires a majority vote of all Tesla, Inc. shares, a requirement Musk described as a "high hurdle." Because he is a conflicted party, Musk will not participate in the committee discussions. Analysts suggest the merger could increase Musk's voting control to approximately 58%, though regulatory approval in China remains a primary obstacle due to Tesla, Inc.'s manufacturing footprint in Shanghai.

The announcement followed SpaceX's first profitable quarter as a public company, reporting a $4.4 billion net income on $14.6 billion in revenue. This growth was driven largely by its superintelligence division, which grew 830% to $7.6 billion. Musk projected that SpaceX could reach $1 trillion in annual revenue by 2028, accelerating his previous estimates of 2029 or 2030. He also outlined plans to increase Starship launch frequency to weekly by early 2027 and launch a hybrid mobile network in the United States by 2028.

Market reactions were mixed. While SpaceX shares jumped nearly 10% following the earnings report, Citadel CEO Ken Griffin warned that the broader AI market is "almost certainly" in a bubble.