Musk Confirms SpaceX and Tesla Boards Have Formed Committees to Explore a Merger

Elon Musk said on Tuesday that SpaceX and Tesla have each formed special committees of independent directors to explore a possible merger, confirming for the first time that his two largest companies are formally discussing a combination.

Musk, who runs both companies, made the announcement on SpaceX’s third-quarter 2026 earnings call. “I think it would be a good idea, but it’s really up to the special committees of both companies,” he said. “Because I’m a conflicted party, I can’t actually be in the discussions of the special committees,” according to Reuters.

Musk said the committees were formed at the request of shareholders, who would need to approve any deal. He cautioned against treating a merger as a done deal, noting that the committees had not agreed on transaction terms and may never do so.

The announcement sent SpaceX shares up 8% in extended trading, while Tesla shares rose 1.8%, Reuters reported. Speculation about a deal has built in recent weeks, with Barclays suggesting last week that a deal could be announced before Tesla’s annual meeting in December.

Merger would hinge on Tesla shareholder vote

Musk framed the possible combination around artificial intelligence and chipmaking. “I do think there’s a lot of merit to combining the companies as we are pretty much in the superintelligence singularity, and there’s a lot to be gained from cooperating on developing superintelligence software, chip design, the Terafab obviously, robotics, mass-to-orbit with the Starmind constellation, connectivity,” he said.

Terafab, a chip manufacturing joint venture between the two companies, should produce its first test chip around May or June of next year and aims to reach volume production by the third quarter of 2028, Musk said on the call.

Any deal would also need to clear a high bar at Tesla, where Musk holds nearly a fifth of the shares. According to TechBriefly, citing Fortune, a merger would require approval from a majority of all outstanding Tesla shares, rather than just a majority of the votes cast. At SpaceX, Musk controls about 82% of the voting power, making his vote decisive for the space company.

SpaceX posts first quarterly profit as a public company

The merger news came alongside SpaceX’s quarterly results. Revenue climbed 161% to $14.58 billion for the three months ended September 30, and the company reported net income of $4.4 billion, compared with a $1.1 billion loss a year earlier, its first profit since going public.

The biggest driver was artificial intelligence. AI revenue surged nearly 10 times to $7.56 billion, mostly from renting out data-center capacity to developers including Anthropic, Google and Reflection AI rather than from SpaceX’s own models, Reuters reported. Musk said he expects annual recurring revenue of between $500 billion and $1 trillion by the end of 2027.

Starlink reached 13.6 million subscribers in the third quarter, above the 12.19 million analysts expected. Average monthly revenue per subscriber has fallen from $99 in 2023 to $69 as the service expands abroad with cheaper plans.

The spending continues to grow: capital expenses nearly tripled to $19.6 billion in the quarter, and chief financial officer Bret Johnsen said the company expects $35 billion to $40 billion in capital expenditure in the fourth quarter.

Tesla reports its own third-quarter results after the market closes on Wednesday.

Reporting based on coverage by Reuters and TechBriefly.