Musk says SpaceX and Tesla are exploring a merger worth over $3 trillion
Both companies have formed special committees to study combining Musk's rocket and car empires, which would be the biggest merger in history. Tesla shareholders would have to approve it.
At a glance
- Elon Musk said on SpaceX's earnings call on Tuesday, October 20, that SpaceX and Tesla are exploring a merger; each company has formed a special committee.
- The two have a combined market value of about $3.5 trillion — a deal would be the largest corporate merger in history.
- Musk said the idea has 'a lot of merit' because the companies' AI work is complementary, but warned it is not certain and Tesla shareholders would need to approve it.
- SpaceX shares rose more than 8% after hours and Tesla 1.8%; SpaceX merged with xAI in February in a $1.25 trillion deal.
Elon Musk's two biggest companies may become one. Musk said on Tuesday, October 20, that SpaceX and Tesla are exploring a merger, and that each has set up a special committee to study the idea. A deal would create a company worth more than $3 trillion — by far the biggest merger in corporate history.
What Musk said
Speaking on SpaceX's third-quarter earnings call, Musk said the idea has "a lot of merit" because the two companies' artificial intelligence work is complementary. But he urged caution:
- the committees have not agreed on a proposal;
- any proposal must go to shareholders for a vote;
- Tesla shareholders would need to approve it by a majority, which he called "a high hurdle";
- investors should not assume the merger will happen.
The numbers
| SpaceX ranking by market value | 7th largest company in the world |
| Tesla ranking | 11th largest |
| Combined value | About $3.5 trillion |
| Previous record merger | SpaceX–xAI, February 2026, $1.25 trillion |
| SpaceX shares after the call | Up more than 8% after hours |
| Tesla shares | Up 1.8% |
| Musk's net worth | More than $900 billion — the world's richest person |
Why combine them?
Supporters point to overlaps:
- AI: SpaceX now earns more from renting AI computing power than from Starlink, and Tesla is building self-driving software and humanoid robots that need huge amounts of computing.
- Manufacturing: both are known for advanced, high-volume engineering.
- Energy and chips: the companies are already working together on a chip factory in Texas.
An M&A expert at the University of California, Riverside, said the logic is sound because knowledge could flow between two manufacturing-heavy businesses with expertise in robotics, AI and energy.
The concerns
Critics are likely to raise questions about corporate governance — Musk controls both companies, so independent committees must protect ordinary shareholders — and about how a combined company would be valued. Regulators may also examine the deal, and Tesla shareholders have previously been divided over Musk's pay and priorities.
Background
SpaceX listed its shares in June 2026 in the largest stock-market debut ever and merged with Musk's AI company xAI earlier in the year. On Tuesday it reported its first quarterly profit as a public company: $4.4 billion on revenue of $14.6 billion. Musk has also said he plans to give a SpaceX share to every child in America next year.
Why it matters
A combined Tesla–SpaceX would rank among the world's most valuable companies and concentrate rockets, satellites, electric cars, robots and AI under one roof. Its decisions on Starlink and electric vehicles reach consumers worldwide, including in Pakistan and South Asia, where Starlink is expanding.
What happens next
The special committees will study the idea and decide whether to put a formal proposal to shareholders. Tesla reports its own quarterly results this week, when investors will press for more details.
Questions people are asking
Are Tesla and SpaceX merging?
They are exploring it. Musk said on October 20, 2026, that both companies have formed special committees to study a merger, but no proposal has been agreed and any deal would need shareholder approval.
How much would a Tesla–SpaceX merger be worth?
The two companies have a combined market value of about $3.5 trillion, which would make it the largest corporate merger ever.
Why would Musk merge Tesla and SpaceX?
Musk says their artificial intelligence work is complementary. Both companies also rely on advanced manufacturing, robotics and energy infrastructure, which supporters say could create synergies.
