Tesla earnings loom after Musk calls SpaceX merger a 'good idea'

Musk backs a possible merger

Speaking Tuesday during SpaceX’s third-quarter earnings call, Musk said he considers combining SpaceX and Tesla a good idea. He added that the decision rests with shareholders. Musk said both companies formed committees of independent directors at shareholders’ request. He is excluded from their discussions because he is a conflicted party, and the committees have not settled on transaction terms.

Musk said approval is not guaranteed. He also said 50 percent of all Tesla shareholders would need to approve a deal, but that vote would happen only if the committees agree on terms.

Companies share technology ambitions

SpaceX and Tesla began in different industries, but both are moving toward artificial intelligence. SpaceX has indicated in public financial documents that orbital data centers could provide computing support for AI on Earth.

Tesla’s stated future focus includes self-driving vehicles, robots and industrial hardware. Both companies would need advanced chips and energy, while SpaceX could provide connectivity for Tesla equipment. Musk cited potential cooperation in AI software, chip design, Terafab, robotics, mass to orbit with the Starmind constellation, and connectivity. SpaceX acquired Musk’s AI firm xAI in February, and went public in June in what the article describes as the largest IPO on record.

Voting control and valuations

SpaceX documents filed for its IPO show Musk holds more than 82 percent of its voting power. At Tesla, he holds about 20 percent. A combined company could give him majority voting power, depending on valuations and negotiated terms.

At the time Musk spoke, SpaceX was valued at about $2 trillion and Tesla at about $1.5 trillion. The article says those figures and deal terms would shape the outcome.

Questions over future priorities

Some political leaders may object to concentrating more power and influence in a company controlled by Musk. The merger’s effects on SpaceX’s Mars ambitions and Tesla’s earlier aim of expanding electric vehicles globally are not yet clear. The article suggests a combined company would probably prioritize AI and the computing capacity behind it, potentially placing less emphasis on Mars exploration and cars.