A possible SpaceX Tesla merger is under review by special committees of independent directors at both companies, Elon Musk said on October 20, 2026. Musk endorsed combining the businesses but said neither committee had settled on terms, leaving a transaction involving companies valued at roughly $3.5 trillion far from certain.
Key Takeaways
- Independent board committees are considering a combination, with no transaction terms settled.
- Musk supports a merger but said he cannot participate in discussions because he is a conflicted party.
- The proposed rationale centers on shared AI ambitions across computing, satellites, vehicles and robots.
Table of Contents
- SpaceX Tesla merger review has no agreed terms
- AI ambitions connect otherwise distinct businesses
- SpaceX results show the scale of its AI expansion
- Conclusion
SpaceX Tesla merger review has no agreed terms
Speaking on SpaceX’s earnings conference call, Musk said both boards had established special committees to consider a combination. He cautioned that securing sufficient support from Tesla shareholders could be difficult.
“I think it would be a good idea, but it’s really up to the special committees of both companies,” Musk said. He added that his conflicts prevent him from taking part in their discussions.
SpaceX was valued at about $2 trillion and Tesla at approximately $1.5 trillion. Those figures describe the companies’ respective valuations, not an agreed purchase price or negotiated value for a merger. No exchange ratio or other transaction terms were disclosed.
Musk also pushed back against treating a deal as inevitable, saying the assumption that a combination was certain would be an overstatement.
| Item | Details |
|---|---|
| Super Intelligence | Q3 2026 revenue of $7.56 billion; operating income of $431 million. |
| Connectivity | Q3 2026 revenue of $5.25 billion, up 69% year over year. |
| Space | Q3 2026 revenue of $1.77 billion, up 6% year over year. |
| Starlink consumer subscribers | 13.6 million at September 30, 2026. |
AI ambitions connect otherwise distinct businesses
A combination would bring electric vehicles and energy-storage batteries together with rockets, satellite communications and AI computing infrastructure. The stated rationale is the companies’ shared ambition to apply AI to orbital data centers, autonomous vehicles and humanoid robots.
That strategic overlap is the case being put forward for a deal, rather than a completed integration plan. The committees have yet to establish the terms on which shareholders would combine these different businesses.
Both companies’ shares extended gains after Musk’s comments and rose in premarket trading on October 21. SpaceX closed the preceding session at $147.79, about 10% above its June IPO price of $135. Tesla remained down 17% for the year despite its advance.
SpaceX results show the scale of its AI expansion
The merger comments followed SpaceX’s third-quarter results announcement, which showed revenue of $14.6 billion for the quarter ended September 30, 2026, up 161% from a year earlier. Net income reached $4.4 billion, compared with a $1.1 billion loss a year earlier and analysts’ average projection of $1.88 billion.
Super Intelligence, the company’s AI business, became its largest revenue segment. New cloud-services agreements, the August acquisition of coding-tool developer Cursor and increased Grok adoption supported its expansion.
The earnings picture also illustrates the different activities a merger would bring together: rapid AI infrastructure growth, recurring satellite-connectivity revenue and a slower-growing launch business.
Chief Financial Officer Bret Johnsen said SpaceX expected total revenue to reach as much as $37 billion in the first quarter of 2027. That is management’s outlook, not a reported result. He also indicated that the company expected to continue borrowing.
Conclusion
The next decision rests with the independent committees: whether to recommend a combination and on what terms. Musk’s endorsement establishes his preference, but it does not establish an agreed transaction or assured shareholder support.
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