Musk says SpaceX and Tesla merger could boost AI and robotics
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Musk has confirmed that independent director committees at SpaceX and Tesla are discussing a possible merger, though they have not agreed terms. He supports combining the companies, saying it could help their work on artificial intelligence, chips, robotics and connectivity, but says shareholders must back any deal.
The proposal follows SpaceX’s acquisition of Musk’s AI firm xAI and its record-setting public offering. SpaceX was valued at about $2 trillion and Tesla at $1.5 trillion; Musk holds more than 82 per cent of SpaceX’s voting power and about 20 per cent at Tesla. A merger would face US regulatory scrutiny and require approval from 50 per cent of Tesla shareholders, and could shift the businesses’ focus further towards AI computing.
- Committees at SpaceX and Tesla are discussing a possible merger.
- Musk says combining them could advance AI, chips and robotics.
- No terms are agreed, and shareholder approval would be needed.
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SpaceX is a space and communications company, while Tesla makes electric vehicles and energy products. Both are led by Elon Musk, who also owns the artificial intelligence company xAI; SpaceX has acquired xAI.
The companies are separately owned, with shareholders and independent directors involved in major decisions. Musk has much more voting power at SpaceX than at Tesla, where other shareholders have a larger say.
Bringing the companies together could link their work on computing, artificial intelligence, chips and robotics. Any deal would need shareholder backing and face scrutiny from US regulators, and could affect what the businesses prioritise.
Full account
Elon Musk has said he favours a merger between Tesla and SpaceX, arguing that closer ties could support their work in artificial intelligence, computing chips and robotics. He made the remarks during a question-and-answer session on SpaceX’s quarterly results call, while stressing that any deal would need shareholder backing and was far from certain.
Both companies have appointed special committees of independent directors to consider a possible transaction, at shareholders’ request, Musk said. He described himself as conflicted because he leads both businesses and said he was not taking part in the committees’ discussions. They have not agreed terms, and Musk cautioned that they might not do so. A merger would also require approval from shareholders; he singled out Tesla’s 50 per cent threshold as a substantial hurdle.
Musk pointed to potential cooperation in AI software, chip design, robotics and connectivity. The companies have already joined forces on Terafab, a chip-making initiative. Their businesses are also shifting beyond their original focus: Tesla is investing in autonomous vehicles and robotics, while SpaceX is expanding into computing services alongside its rockets and Starlink satellite network. The reports describe these developments as a basis for possible synergies, though they do not establish that a merger would deliver them.
The proposed combination would be exceptionally large, with the reports putting SpaceX’s valuation at about $2 trillion and Tesla’s at roughly $1.5 trillion. They also note that Musk’s voting influence differs between the companies, but the effect a merger might have on his control would depend on the deal’s valuation and terms. The reports say the proposal could face regulatory scrutiny. Market reactions were mixed in scale: one account reported an 8 per cent rise in SpaceX shares after hours and a 2 per cent rise in Tesla shares, while the other did not give trading figures.
Where outlets differ
One report focuses on the strategic case for combining the firms and the possible effect on Musk’s voting control, and says regulators would scrutinise a deal. The other gives more detail on SpaceX’s financial results and business lines, the shareholder approval threshold at Tesla, and after-hours share movements. Their descriptions of SpaceX’s financial position also differ in emphasis: one highlights its expanding computing business, while the other reports that the company remains loss-making overall despite revenue from computing and Starlink.
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Originally published by Ars Technica as “Merging SpaceX and Tesla would be a “good idea,” Musk says”.