Elon Musk has confirmed that SpaceX and Tesla have established independent special committees to evaluate a potential combination of the two companies, sending SpaceX shares up 8% and Tesla shares up 1.8% in extended trading.
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The official confirmation follows months of market speculation regarding an operational merger between the electric vehicle manufacturer and the aerospace giant.
Speaking on an investor conference call, Musk acknowledged that while he favours a merger, he is recused from committee deliberations due to his ownership stakes—holding nearly 20% of Tesla and just under 50% of SpaceX. The independent board committees were initiated following formal shareholder requests.
Musk cited expanding technical synergies between the companies as the core driver for a union, emphasizing shared initiatives across artificial intelligence, robotics, custom silicon, and orbital computing infrastructure:
- Terafab Joint Venture: The joint chip-manufacturing initiative between Tesla and SpaceX is slated to produce its first test silicon by mid-2027, targeting full volume production by Q3 2028.
- Superintelligence Infrastructure: The proposed merger aims to consolidate software development across the Grok AI platform, autonomous robotics, and orbital satellite constellations.
Sources familiar with the discussions indicate that talks could culminate in SpaceX acquiring Tesla, with investment bankers advising on the structural framework. However, Musk cautioned that talks remain preliminary and may not yield a definitive agreement.
The merger disclosures coincided with SpaceX reporting its first profitable quarter as a public company, underpinned by surging demand for its high-performance AI data centre capacity:
See also
- Quarterly Revenue: Total revenue reached $14.58 billion (approx. R255 billion), marking a 161% year-over-year increase.
- AI Compute Segment: Revenue generated directly from AI services surged nearly tenfold to $7.56 billion (approx. R132 billion), driven by cloud infrastructure leases to developers including Anthropic, Google, and Reflection AI.
- Net Income: Net profit reached $4.4 billion (approx. R77 billion), rebounding from a $1.1 billion net loss during the same period last year.
SpaceX management projected annual recurring revenues to reach between $500 billion and $1 trillion by late 2027. To support this trajectory, quarterly capital expenditures reached $19.6 billion, with plans to allocate up to $40 billion in the fourth quarter for Nvidia compute hardware.
SpaceX’s satellite broadband division, Starlink, expanded its global user base to 13.6 million subscribers during the third quarter. However, global expansion into lower-income regions has reduced average revenue per user (ARPU) from $99 in 2023 to $69 per month.
In South Africa, Starlink remains unlaunched due to regulatory hurdles with the Independent Communications Authority of South Africa (Icasa). Regulators maintain that SpaceX’s proposed equity-equivalent investment framework, offered in lieu of transferring 30% direct equity to historically disadvantaged groups, would require legislative amendments to the Electronic Communications Act before operational spectrum licenses can be granted.
