Musk Again Hints at Possible SpaceX-Tesla Merger

Elon Musk, CEO of Tesla (TSLA-US) and SpaceX (SPCX-US), has once again hinted that the two companies might merge in the future. With growing collaboration between them in chips, artificial intelligence (AI), energy, and autonomous driving, Wall Street speculation over the integration of these two trillion-dollar enterprises is intensifying.

On Monday (14th), Musk appeared at the All-In Summit alongside SpaceX President Shotwell to discuss topics including Starlink, Starship, space-based AI data centers, and government regulation. They also addressed the Terafab chip factory jointly advanced by Tesla and SpaceX, as well as their joint R&D efforts underway in Austin, Texas.

When asked why the two companies remain independently operated despite such close cooperation across so many areas, Musk responded: "That's a good question. With so much collaboration across so many domains and levels, who can imagine what actions might be taken in the future?"

This cryptic reply has once again sparked speculation about a potential merger. However, neither Tesla nor SpaceX has responded to media requests for comment, and Musk has not disclosed whether any formal integration process has been initiated.

Musk has hinted at this possibility before.

This is not the first time Musk has alluded to a possible merger. Ahead of SpaceX's rumored initial public offering (IPO) in June, reports indicated he had publicly discussed integration. During SpaceX's Q2 earnings call, he acknowledged increasing overlap between the two companies across multiple areas, particularly evident in Terafab.

At the time, Musk stated that an earnings call was not the appropriate venue to discuss corporate mergers, adding that any integration would need to follow formal procedures—but he did not elaborate on transaction pricing or timelines.

Some Wall Street analysts, including Baird and RBC, have previously assessed that Tesla and SpaceX could ultimately merge.

From Financial Investment to Technical Collaboration

Currently, Tesla and SpaceX are not only closely linked in operations but also increasingly intertwined financially. Tesla holds equity in SpaceX, and the two companies signed a framework agreement earlier this year to govern future collaborations.

SpaceX has long procured batteries, energy products, and Cybertrucks from Tesla; in turn, Tesla is gradually integrating AI and satellite communication technologies from Musk’s ecosystem into its products.

The Grok model developed by xAI has already been integrated into Tesla vehicles and is being used in the 'digital version' of the Optimus humanoid robot. Starlink is expected to be introduced into the Cybercab, later expanding to other Tesla models, providing stable connectivity for robotaxis.

The upcoming new Tesla Roadster, set to debut on October 1, may incorporate SpaceX propulsion technology—potentially enabling the vehicle to briefly levitate or hover—further highlighting the two companies’ collaboration in hardware development.

Terafab at the Core of Merger Speculation

The most significant point of convergence between the two companies is the Terafab chip manufacturing initiative.

Musk noted that without sufficient chip supply, Tesla’s ability to scale up Optimus production would be constrained, making Terafab a critical foundation for both companies’ AI ambitions.

If Tesla and SpaceX eventually integrate, the greatest benefit would be unifying AI chips, computing infrastructure, digital applications, autonomous driving, robotics, satellite communications, and manufacturing under one umbrella—gaining control over a more complete AI value chain.

However, since Musk has not clarified the method, valuation, or timeline for integration, the market remains cautious. On Tuesday, SpaceX shares fell 3.15% to close at $143.49 per share; Tesla declined 0.67% to $356.68. Over the same period, the S&P 500 dipped 0.45%, and the Dow Jones Industrial Average closed down 0.63%.