Space X and Tesla's merger: Elon Musk eyes a trillion dollar corporate deal to unite AI, cars, and space

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25 Oct 2026, 10:01 am

Elon Musk says that SpaceX and Tesla have set up special committees to study the possibility of merging the two companies in a deal worth about $3.5 trillion. A merger would bring rockets, satellite internet, artificial intelligence (AI), electric cars, and robots together under one company. However, Musk has warned that the merger is not certain to happen. It would need approval from more than half of all Tesla shareholders.

SpaceX and Tesla's merger: What each company brings to the deal

Musk started SpaceX in 2002 to make space travel cheaper and eventually send people to Mars. The company uses reusable rockets called Falcon 9, which are a major force in the global rocket launch industry. Its Dragon spacecraft carries NASA astronauts to the International Space Station. SpaceX also runs Starlink, a network of satellites that provides internet service around the world.

BREAKING: Elon Musk plans to merge Tesla and SpaceX in a $3.7 trillion mega-deal There is a 70% chance it will happen before 2028

— Kalshi Finance (@Kalshi_Finance) October 24, 2026

SpaceX now does much more than launch rockets and provide satellite communications. This month, it bought xAI, an artificial intelligence company run by Musk that created the well-known chatbot Grok. SpaceX had already acquired X, a social media platform, in 2025. SpaceX became a publicly traded company in 2026 and is estimated to be worth $2 trillion. Much of its recent growth has come from renting computing power at data centres to other AI companies.

Tesla was founded in 2003 and became one of the best-known electric carmakers after Musk became its CEO in 2008. The company is estimated to be worth about $1.5 trillion. However, its main business of making cars faces challenges. Musk is focusing on developing self-driving robotaxis and Optimus, a human-shaped robot.

Elon Musk on a possible SpaceX–Tesla merger: "Do I think it would be a good idea? Yes" Both SpaceX and Tesla have set up special committees made up of independent directors to discuss the idea, following requests from shareholders. Because Elon has a conflict of interest, he cannot take part in these discussions. "Some people out there assume that a SpaceX and Tesla merger is a certainty, and I think that would be overstating it" "The special committees have not reached agreement on the terms of any transaction. And obviously there's no guarantee that they will" For Tesla, the deal would need votes in favour from holders of 50% of all shares, not just 50% of the shares that are voted. This is a difficult requirement. So why does Elon support it? "I do think there's a lot of merit to combining the companies as we are pretty much in the super intelligence singularity" "There's a lot to be gained from cooperating on developing super intelligence software, chip design, the Terafab, obviously robotics, mass to orbit with the Starmind constellation. Connectivity" The next step is for the special committees at both companies to agree on the deal's terms. After that, shareholders will vote on it.

— X Freeze (@XFreeze) October 20, 2026

Musk says he believes merging SpaceX and Tesla would be a good idea. However, getting approval could be difficult. The deal needs support from more than half of all Tesla shares, and Musk has described this requirement as a major challenge.