Tesla and SpaceX Form Special Committees to Explore Potential Merger
Tesla and SpaceX have formed special committees to discuss a potential merger, Elon Musk announced during SpaceX’s third quarter earnings call on Tuesday. Following the confirmation, Tesla’s stock rose a little less than 2% during the call, and traded up around 1.6% in after-hours trading, while SpaceX shares were up around 6.6%. Analysts weighed in on the development, with Yorkville Ives partner and senior managing director Dan Ives stating that his firm sees an over 80% chance of the merger happening next year, and Deepwater Asset Management managing partner Gene Munster claiming via a post on X that there is a 95% chance it takes place in the next two years.
Musk Sees Merit in Merger but Warns of Hurdles
Musk, who helms both companies and owns billions of dollars in stock of each, stated on the call, I’m a conflicted party; I can’t actually be in the discussions of the special committees,
adding personally that he thinks it would be a good idea. I do think there’s a lot of merit to combining the companies as we are pretty much in the superintelligence singularity,
Musk said. However, he cautioned investors against viewing the deal as a certainty, noting that the committees have yet to reach an agreement on terms. Even if an agreement is reached, the deal requires approval from shareholders of both companies, with Musk emphasizing that on the Tesla side it would require a 50% vote of all shares, not just those who vote, but of all shareholders,
which he described as quite a high hurdle.
A personal benefit noted in an August Wall Street Journal report is that the merger might boost Tesla’s valuation high enough to satisfy requirements for Musk to receive a $1 trillion pay package.
Odds of $SPCX + $TSLA combo just inched up.The question came up on the call. Elon says he thinks it’s a good idea, and there are a lot of merits to combining the companies, but shareholders still have to be supportive.Believe me, shareholders would support this. Elon says…
AI Integration and Manufacturing Partnerships
The potential combination would unite entities that already share extensive artificial intelligence and engineering initiatives. Both companies have AI at the heart of their business narratives, spanning SpaceX’s AI division—recently renamed to SI to follow a naming convention—and Tesla’s physical AI business encompassing autonomous driving and Optimus robots, into which Musk wants to integrate SpaceX’s Grok. SpaceX and Tesla have also collaborated on artificial intelligence software, chip design, Terafab manufacturing efforts, robotics, Starlink satellite connectivity, and SpaceX’s payload launch capabilities, alongside a recent Tesla Roadster demo featuring SpaceX cold-gas thrusters. Regarding Terafab, Musk claimed SpaceX notched some significant potential breakthroughs in chip fabrication,
expressing optimism that the Texas chip factory project will ultimately do what the name suggests, which is to make a terawatt of superintelligence chips per year.
Meanwhile, SpaceX reported stellar financial results for the quarter, with revenue coming in almost $2 billion above market expectations per LSEG consensus estimates reported by CNBC, largely driven by a roughly ninefold revenue jump in its AI business up to $7.56 billion from $813 million in the same quarter last year.
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Elon Musk just announced on SpaceX’s Q3 earnings call that @Tesla and @SpaceX have formed special committees to discuss the possibility of a merger!Elon: “There’s no guarantee that they will (merge), but I do think there is a lot of merit to combining the companies as we are… pic.twitter.com/Kq6mtzjcVK”