Musk says Tesla and SpaceX have formed special committees to explore a possible merger

Elon Musk said Tesla and SpaceX have formed special committees to explore a possible merger, calling it ‘a good idea’ during SpaceX’s Q3 earnings call on Tuesday. The committees are discussing a deal that would join two companies valued at roughly $3.6 trillion combined, though Musk cautioned that nothing has been agreed.

The special committees consist of independent directors and were formed at the request of shareholders, Musk said, though he did not name the members. Musk is not on either committee, nor is he involved in any of their discussions, because he is a ‘conflicted party’ as CEO of both companies. ‘So it’s an odd kabuki dance where two groups of people are talking and I can’t be in the conversation,’ he said. The committees have not reached agreement on terms of any transaction, and there is no guarantee they will.

Shareholders would ultimately decide. Musk said at least 50 percent of Tesla’s shareholders, of all shares and not just those who vote, would need to approve any deal. He described the threshold as ‘quite a high hurdle to achieve.’

Musk’s case for combining

Musk said there is a lot of merit to merging and a lot to be gained. He cited cooperation on superintelligence software, chip design, the TeraFab, robotics, mass to orbit with the Starmind constellation, and connectivity as areas where the two companies overlap. Tesla is valued at roughly $1.5 trillion and SpaceX at $2 trillion, meaning a merged entity would be valued upwards of $3.6 trillion. Most Wall Street analysts and legal experts believe SpaceX would acquire or absorb Tesla through a stock swap rather than the reverse. SpaceX has maintained a higher valuation than Tesla since its IPO, and a SpaceX-absorbs-Tesla structure would let SpaceX shareholders hold majority control of the combined company. Barclays published a note earlier this month suggesting a combination could be announced ahead of Tesla’s annual shareholder meeting on December 3, 2026.

SpaceX’s Q3 results

SpaceX announced Q3 revenues of $14.6 billion, up 161 percent year-over-year, fueled by its Super Intelligence segment and accelerated growth in Connectivity. The SI business posted revenue of $7.6 billion, up 830 percent year-over-year, driven by new cloud services agreements, the Cursor acquisition, and increased Grok adoption. Connectivity revenue was $5.2 billion, with 13.6 million Starlink consumer subscribers. Space business revenue was $1.8 billion, up six percent year-over-year, with a $7 million operating loss. The Connectivity group posted operating income of $2.4 billion, while the SI group posted $431 million. This is SpaceX’s second earnings report after its IPO in June.

Q3 included the closing of the $60 billion Cursor acquisition, the 13th Starship launch, and the launch of a new V5 Starlink residential dish. Musk said SpaceX will try catching Starship and its booster next month, and that Starlink could generate ‘several hundred billion dollars a year.’ Tesla reports earnings on Wednesday. SpaceX livestreamed its earnings call on X.