Musk Opens the Door to a $3.5 Trillion Mega-Merger as Tesla and SpaceX Form Deal Committees.

The world's richest man says he sees "merit" in uniting his two flagship companies, but warns a deal is far from certain.

October 21, 2026

Elon Musk has confirmed that Tesla and SpaceX are seriously weighing a merger that would create one of the largest companies on Earth. It would also be the biggest corporate tie-up in history.

Musk made the disclosure on SpaceX's earnings webcast on Tuesday, after the rocket company posted its first profit as a public company, $4.4 billion in net income. Together, SpaceX and Tesla are worth about $3.5 trillion at current valuations.

Committees formed, no terms yet

The speculation has now turned into process. Musk confirmed that Tesla and SpaceX have each formed a special committee of independent directors to discuss a possible merger. He said the committees were created at the request of shareholders.

Musk is keeping his distance from the talks. He said he is not a member of either committee and described himself as an "interested party" as CEO of both companies. He added that he is a conflicted party and that the committees have not yet agreed on terms.

He also tried to cool expectations. "Some people out there assume that a SpaceX and Tesla merger is a certainty, and I think that would be overstating it," he said. No definitive merger agreement has been announced, and Musk said shareholder support would be necessary.

A high bar for shareholders

Any deal would have to win over Tesla's investors. At least 50 percent of Tesla shareholders must approve it, a threshold Musk called a fairly high hurdle. A deal would also have to work for SpaceX's owners. A transaction attractive to Tesla shareholders would need to make financial sense for SpaceX shareholders as well.

Musk was open about his own view. "I do think there's a lot of merit to combining the companies," he told listeners, pointing to the gains from cooperating on superintelligence software. He tied software development directly to robotics, and SpaceX president Gwynne Shotwell added connectivity to the list, which Musk endorsed.

Markets react

Investors responded quickly. Reuters reported that SpaceX shares rose about 8 percent and Tesla shares about 1.8 percent in extended trading on Tuesday. By Wednesday's pre-market session, Tesla was up about 2 percent at $381.30, while SpaceX had gained nearly 9 percent to $160.70.

Not all of SpaceX's jump can be pinned on merger talk. The disclosure came alongside strong earnings and an upbeat AI growth outlook, so describing the full rise as merger-driven would be misleading.

An empire already intertwined

Musk's companies already do a lot of business with each other. SpaceX's IPO prospectus shows it bought nearly $700 million of Tesla Megapack battery systems over two years to support xAI data centers in Tennessee, and spent another $131 million on Cybertrucks in 2025. The recent launch of Terafab, a joint Tesla and SpaceX chip-making project, was another sign that Musk sees his companies working better together.

The technology case has been discussed for months. Earlier reports said Tesla's energy-storage technology could power orbital data centers with solar energy, and that Musk has proposed sending Tesla's Optimus robots to the Moon and Mars aboard Starship rockets. The numbers on the AI side are large. SpaceX ended the quarter with 1.7 gigawatts of computing capacity and plans to add at least 13 more by the end of next year.

What the experts say

Analysts see logic in the idea but also real obstacles. Jerayr Haleblian, a mergers and acquisitions expert at the University of California, Riverside, said a SpaceX-Tesla merger has "sound logic" behind it. Earlier in the year, venture capitalist Chamath Palihapitiya went further, saying such a deal would create "the Berkshire Hathaway of the modern century."

Skeptics have pointed to regulatory, governance and structural hurdles. Earlier coverage called a SpaceX-Tesla deal unlikely for those reasons. For some Tesla investors, though, consolidation also addresses a long-standing worry that Musk is spreading himself too thin.

Not Musk's first merger

Combining his businesses is nothing new for Musk. In 2016, he used Tesla stock to buy the solar company SolarCity. A SpaceX-Tesla union would dwarf even the $1.25 trillion combination of SpaceX and xAI in February.

What happens next

The committees must now negotiate something concrete, which then goes to a shareholder vote. Barclays analysts led by Dan Levy suggested earlier this month that an announcement could come before Tesla's annual shareholder meeting.

For now, the plan is only a possibility. If the committees find a deal that works for both sets of shareholders, a merger could redraw the map of global business, bringing together cars, rockets, satellites, robots and artificial intelligence in a single company. If they do not, the two companies stay separate.