SpaceX-Tesla Merger Talks Get Messy After Musk Goes Public

The SpaceX-Tesla merger just went from fan fantasy to a live boardroom process, and Elon Musk is the one who made it public. On SpaceX's earnings call this week, the billionaire said both companies had formed special committees to study a combination that would be worth roughly three and a half trillion dollars. That would make it the biggest corporate deal in history, and the internet has not stopped talking about it since.

What Musk actually said

According to CNBC, Musk was asked about a tie-up on the SpaceX call on Tuesday and answered plainly. "Do I think it would be a good idea? Yes," he said, while revealing that special committees now exist at both firms. A day later, Tesla's investor relations chief told analysts that executives "will not be addressing" the topic, and Musk told shareholders he had already said everything that should be said.

Musk also admitted he was "tap dancing through a minefield" by commenting at all. He called himself a conflicted party and said he cannot take part in the committee talks. That detail matters, because the whole structure of the process depends on keeping him out of the room.

Why insiders are nervous

Reuters reported that Musk's public endorsement has rattled some people working on the talks. According to Reuters, a person with direct knowledge said the comments could invite shareholder scrutiny and delay the process by several weeks. The source called the disclosure a "mess" for the SpaceX-Tesla merger process.

The worry has a precedent. Tesla's 2016 purchase of SolarCity set off years of litigation after shareholders argued that Musk had steered the deal to rescue a company his cousins founded. The courts eventually upheld that acquisition as fair, but Tesla directors still settled related claims for sixty million dollars. Advisers are now in contact with Musk's lawyers to make sure he stays recused, according to the same Reuters report.

How the deal could work

Reuters also reported that SpaceX approached Tesla in recent weeks and that the companies have discussed several structures. One option is a SpaceX acquisition of Tesla, and another is a merger under a newly formed holding company. An all-stock deal is among the forms of payment being weighed, and discussions are described as early, with advisers already hired.

The math points toward SpaceX as the buyer. CNBC put SpaceX's market value near two trillion dollars and Tesla's near one and a half trillion, which would make SpaceX the acquiring company in a stock swap. Musk controls SpaceX with ten-to-one supervoting shares and nearly eighty percent of the voting power, while he owns about nineteen point eight percent of Tesla.

The vote problem

Tesla holders are a much harder crowd. Musk himself said a merger would need approval from fifty percent of all Tesla shares, not just the ones that cast ballots, calling that "quite a high hurdle." Tesla is also incorporated in Texas now instead of Delaware, which Columbia law professor Eric Talley described to Reuters as a wild card because Texas courts have little history with cases like this.

Wall Street is split on whether the idea makes sense. Analysts at William Blair wrote that the push is about control, not about strengthening either business, and said they struggled to find an opportunity that only a formal combination could unlock. Talley told CNBC that shareholders on both sides could gain from ending fights over which company houses robotics and artificial intelligence work.

Markets, regulators and the clock

The stocks have not exactly celebrated. CNBC reported that Tesla shares fell three percent on Thursday and are down seventeen percent for the year, while SpaceX dropped nine percent, erasing its Wednesday gains. Tesla's earnings report showed falling auto revenue and an even steeper decline in its energy business, so the merger chatter arrived at a convenient moment for a company selling a future built on robotaxis and humanoid robots.

Regulators would be a major obstacle. Former Tesla board member Steve Westly told CNBC that China is critical because it generated twenty-two percent of Tesla's revenue last year, and he expects the companies to move fast, ideally before the midterm elections. Bloomberg, as summarized by Euronews, reported that the aim is to announce a deal in the first half of next year and finish it before President Donald Trump leaves office.

What to watch next

For anyone who owns Tesla stock or just follows the Muskonomy, the next signals are the special committees' findings and any formal proposal. This would build on a run of deals that already tied the empire together, including SpaceX's purchase of xAI earlier this year and its sixty billion dollar acquisition of the coding startup Cursor, according to CNBC. For more on how big tech money moves, browse the tech section.

The bottom line is simple: nothing is agreed, the committees can say no, and the legal and political hurdles are huge. Yet the SpaceX-Tesla merger is now an official process rather than a rumor, and every move Musk makes in public from here will be judged against the SolarCity playbook.