Reports say Musk has discussed with colleagues, reigniting rumors of a SpaceX-Tesla merger.
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As SpaceX is about to be listed on Nasdaq, market speculation about the potential merger of Musk's two trillion-dollar companies is heating up again.
On May 26, according to CNBC, sources revealed that Musk himself has discussed the possibility of merging the two companies with colleagues, a news that has significantly increased investor attention to this potential mega-deal.
SpaceX is expected to begin trading on Nasdaq in just over two weeks. Earlier this year, after merging with Musk's AI company xAI, its private market valuation reached $1.25 trillion; Tesla's current market cap is about $1.6 trillion. If the two companies eventually merge, it would create a tech giant with a world-leading market value.
Reports say that sources claim the two companies have extensive overlap in personnel, assets, and capital expenditures, and internal discussion on the merger topic is not rare. A current Tesla employee said that many staff have long expected such a deal to eventually occur, and related topics are openly discussed within the company.
Legal experts point out, such mergers carry limited antitrust risks, but issues like equity valuation and parent company attribution pose complex challenges.
Why the merger rumors have resurfaced
The acceleration of SpaceX’s listing process is the direct trigger for the renewed round of merger discussions.
Musk is expected to start SpaceX’s roadshow next week, introducing this 24-year-old comprehensive enterprise to Wall Street. Currently, SpaceX’s businesses cover reusable rockets, Starlink satellite internet service, and xAI (including social media platform X), and it has signed a $60 billion agreement to acquire AI coding startup Cursor.
Once SpaceX successfully goes public, Musk will simultaneously oversee two of America's top ten companies by market capitalization. Sources reveal that Musk's ultimate goal may be to integrate the two companies into one.
Tesla and SpaceX have accumulated years of resource sharing and personnel overlap, and their interconnection goes far beyond common perception.
At the board level, Musk serves as a director of both companies, and venture capitalist Ira Ehrenpreis also sits on both boards. Musk's brother Kimbal is currently on Tesla's board and previously served as a SpaceX director.
SpaceX directors Antonio Gracias and Steve Jurvetson have both served on Tesla’s board. Charles Kuehmann is vice president of materials engineering at both Tesla and SpaceX.
On the capital interaction level, Tesla disclosed in January it had invested $2 billion in xAI, and after xAI merged into SpaceX, this stake converted to shares in SpaceX.
According to a Wallstreetcn article, SpaceX disclosed in its prospectus that between 2024 and 2025, it purchased Tesla Megapack energy storage systems worth $697 million to power xAI's Colossus data center in Memphis, Tennessee; it also bought Tesla Cybertrucks at suggested retail prices, worth $131 million.
Previous transactions between the two included Tesla selling solar devices and car parts to SpaceX, Tesla using SpaceX’s private jets, and SpaceX assisting Tesla in special alloy development for the Cybertruck. Suppliers sometimes view Musk’s companies as the same client—in 2024, Nvidia, at Musk’s request, redirected a $500 million GPU order from Tesla to xAI.
AI strategy drives the two companies toward convergence
On the surface, a rocket company handling government contracts and an electric car manufacturer seem to have little in common, but both are increasingly focused on artificial intelligence and the talent and computing resources required.
SpaceX had capital expenditures of $10.1 billion in Q1, over three-quarters of which were related to AI; Tesla stated in its latest financial report that this year’s capital expenditure will be roughly tripled to over $25 billion.
Theory Ventures investor and former engineer Tomasz Tunguz said:
"Tesla must run powerful AI systems inside vehicles on the move, while facing strict constraints on power consumption, heat dissipation, latency, reliability, and cost; SpaceX must consider computing power in orbit, with radiation, thermal cycling, launch mass, power generation and thermal emission all being life-and-death design constraints."
He believes the potential merger has sparked widespread attention in Silicon Valley, but admits such a deal would be "extremely complex."
Potential obstacles to the merger and Musk’s interests
Legal experts note that a SpaceX-Tesla merger is unlikely to trigger regulatory resistance on antitrust grounds, but shareholder rights protection will be the core challenge. Which company will be the parent, how to swap shares, and who sets fair pricing are all thorny issues.
Notably, Musk holds 85% voting rights in SpaceX; in its prospectus, SpaceX defines itself as a “controlled company” in the risk factors section. This means Class A shareholders “do not enjoy the same protection as shareholders of companies subject to all Nasdaq governance requirements.” This structure ensures Musk faces almost no board obstacles at SpaceX.
From an incentive perspective, the potential benefits to Musk himself are also not negligible. SpaceX ties Musk's compensation rewards to two milestones: achieving a $7.5 trillion valuation, and establishing a settlement of at least one million people on Mars. Tesla shareholders approved a compensation plan at the end of last year with 12 tiers, each tied to market value growth and operational performance.
Gerber Kawasaki CEO Ross Gerber previously said a SpaceX-Tesla merger would allow Musk to realize his dream of running a large comprehensive company and would help raise and borrow funds more efficiently in AI competition with giants like Google.
Longtime SpaceX investor and Nebex CEO Tejpaul Bhatia believes the significance of the merger is mainly about seizing the huge opportunity in SpaceX’s core market. “I believe the space market is currently huge, and it will only keep growing after SpaceX’s IPO,” he said.
Bhatia also said Musk's "parallel entrepreneurship" model has proven effective. “It seems workable for him,” he said.
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