Tesla SpaceX Merger: Musk Backs a $3.5T Mega-Deal

The Tesla SpaceX merger just went from internet rumor to a real boardroom process. Elon Musk said on Tuesday that combining his two companies would be "a good idea," and revealed that independent directors at both firms have formed special committees to study it, according to Reuters.

What Musk actually said

The news dropped during SpaceX's third quarter earnings call. An analyst asked about a tie-up, and Musk did not dodge. He said there is a lot of merit to combining the companies because, in his words, the world is pretty much in the superintelligence singularity, per CNBC.

He also hit the brakes on the hype. Musk said assuming a merger is certain would be overstating it, and that shareholders would have to support any deal. On Tesla's own earnings call a day later, he quipped that he felt like he was tap-dancing through a minefield, according to the BBC.

The numbers behind the megadeal

At current market values, the two companies together are worth about three and a half trillion dollars. That would make it the biggest corporate merger in history, as Fortune and Reuters both note.

SpaceX brought momentum to the table. It posted its first quarterly profit since going public, with net income of roughly four point four billion dollars as revenue jumped one hundred sixty-one percent, driven by Starlink and by renting out computing power to other AI companies. Its shares rose around ten percent after the report, according to CNBC.

Tesla's story was calmer. Third quarter sales came in at about twenty-eight billion dollars, basically flat against last year, and profit dipped, based on reporting from the BBC and the Associated Press.

Why would anyone merge a car company and a rocket company?

The pitch is that the lines have blurred. Both businesses now lean on artificial intelligence, robotics, batteries, satellites and giant data centers. Reuters notes that Tesla's energy storage could help power SpaceX's growing computing needs, including future data center projects.

Musk has also said he wants more influence over Tesla to chase its AI and robotics plans. He owns nearly a fifth of Tesla and holds voting control at SpaceX, which is part of why this is so tricky.

Bloomberg points out that a decade ago Musk saw little reason for the two firms to join up, calling the ties between them quite tenuous. Fast forward to 2026 and he is openly endorsing it. That flip says a lot about how much his empire has shifted toward AI, and why the Tesla SpaceX merger suddenly feels plausible rather than like a meme.

There is also a timing angle. Euronews reports the deal is reportedly aimed at closing before President Donald Trump leaves the White House, which adds pressure on the committees to move quickly. Whether regulators, courts and shareholders will play along on that schedule is a totally different question.

The big hurdle: Musk can't be in the room

Because he owns shares in both companies, Musk calls himself a conflicted party and cannot sit on either committee. He described it as an odd kabuki dance where two groups of people talk and he is not allowed in the conversation.

Fortune argues that governance, not engineering, is the real obstacle. Independent directors have to decide whether the price is fair for each side, and then shareholders have to vote yes.

Analysts are already picking sides. Wedbush's Dan Ives called it a no-brainer, but said the price for Tesla shares would likely have to be in the five hundred fifty dollar range to get approved, per Reuters. Tesla investor Gene Munster put the odds of some deal within two years at ninety-five percent.

What Gen Z investors should watch

If you hold Tesla through an index fund or a trading app, expect volatile days. Neither company has shared terms, and talks are exploratory, so this could still collapse or drag on for months.

Keep an eye on committee announcements, any exchange ratio between the stocks, and regulatory pushback. For more market stories, check our tech coverage. This is not financial advice, just a heads-up that one of the wildest corporate stories of the year is only getting started.