The key facts
- Tesla and SpaceX (combined ~$3.5 trillion) have formed committees of independent directors to study a merger
- According to Bloomberg, the deal is planned to be announced in the first half of 2027 and completed before the end of Trump's term in January 2029
- Musk owns ~48% of SpaceX (>80% of votes) and ~20% of Tesla; the deal requires support from more than half of Tesla's shares
Musk confirms merger is being studied
Elon Musk this week confirmed that Tesla and SpaceX are exploring the possibility of a merger. According to Bloomberg, citing informed sources, the combined value of the companies is about $3.5 trillion (€3.1 trillion), which could make the deal the largest merger in history. On Tuesday, at SpaceX's earnings conference, Musk told analysts that both companies had formed committees of independent board members to study the question. He called the idea a good one, but admitted he feels as if he is 'tap-dancing on a minefield.' The committees have not yet agreed on terms, and Musk warned that a merger is not guaranteed.
A decade of combining businesses
The merger would be a continuation of a series of deals that began ten years ago. In 2016, Tesla bought SolarCity, a solar panel installer run by Musk's cousins; the deal was upheld by a Delaware state court only after years of litigation. In March 2025, xAI absorbed the social network X (formerly Twitter), which Musk had bought in 2022 for $44 billion. In February 2026, SpaceX absorbed xAI: the rocket maker was valued at $1 trillion and the AI company at $250 billion, on the eve of SpaceX's IPO. Four months later, SpaceX listed on Nasdaq, raising $85.7 billion — the largest stock market debut in history. In July, Musk spoke on an earnings call about the 'increasingly intertwined' relationship between Tesla and SpaceX.
Motives: AI, finances and control
According to Musk, artificial intelligence will determine the further development of both companies. They are jointly developing Terafab, a plant for manufacturing AI chips in Texas, and Tesla's self-driving cars and Optimus robots could use SpaceX's computing capacity, including planned data centers in orbit. Financial figures also favor a combination: SpaceX reported its first quarterly profit since listing — $4.4 billion with revenue growth of 161%, but its capital expenditures reached $19.6 billion for the quarter, mostly on AI. Tesla reported the next day that net profit fell 43% to $787 million on revenue of $28 billion and a 2% decline in deliveries. A merger would also allow Musk to run all operations under one roof without disclosures and litigation over related-party transactions. Control is another factor: Musk owns about 48% of SpaceX and more than 80% of the votes through preferred shares, whereas in Tesla he holds only about 20%; since 2024 he has said he is uncomfortable developing Tesla in the direction of AI without at least 25% of the votes. In addition, in his Tesla compensation package, many targets are considered achieved upon completing certain types of mergers.
Racing against political deadlines
According to Bloomberg, the goal is to announce the deal in the first half of 2027 and complete it before the end of Donald Trump's presidential term in January 2029. Completing the deal under Trump could ensure a more favorable political reception, although regulators and shareholders will still scrutinize it. Musk, who led Trump's cost-cutting campaign in 2025, reconciled with the president after a public falling-out and returned to the administration; on October 8, 2026, Trump awarded him the National Medal of Science. According to a representative of America PAC, Musk became the largest known donor to Republicans in the midterm elections, having donated more than $276 million since July. A Democratic victory could mean tougher scrutiny of SpaceX's federal contracts and Tesla's self-driving software; SpaceX itself warned in its listing prospectus that a change in the balance of power in Congress could have a 'material and adverse impact on our growth and competitive position.' Any deal would require support from more than half of all Tesla shares, which Musk called 'a pretty serious hurdle.' Tesla's shareholder meeting is scheduled for December 3.
