SpaceX-Tesla merger chatter reignites as Musk rocket company nears IPO
As Elon Musk prepares to take his second trillion-dollar company public, a move that will likely put him at the helm of two of the 10 most valuable companies in the United States, rumors are growing that Musk’s ultimate goal is to combine these assets into a single company.
SpaceX is expected to begin trading on Nasdaq in just over two weeks after achieving a private market valuation of $1.25 trillion when it merged with Musk’s artificial intelligence company xAI earlier this year. Tesla’s Its market capitalization currently stands at around $1.6 trillion.
The two companies already have a list of shared resources, and Musk has discussed the possibility of bringing the companies together with colleagues, according to sources familiar with the talks who asked not to be named due to the sensitivity of the matter.
A current Tesla employee told CNBC that many employees at the electric vehicle company have been waiting for such a transaction to happen for a long time, and that the issue has been openly discussed within the company. Another person close to the company said common challenges related to power and computing constraints have led to regular collaborations.
While a company launching rockets based on government contracts might not seem to have much in common with an EV maker, both businesses are increasingly focused on artificial intelligence and the talent and computing resources needed to build AI infrastructure and services. More than three-quarters of SpaceX’s $10.1 billion in capital expenditures in the first quarter were tied to artificial intelligence, and Tesla said in its latest earnings report that capital expenditures will roughly triple this year to more than $25 billion.
“Tesla has to run powerful AI systems inside a moving vehicle with tight limits on power, cooling, latency, reliability and cost,” said Tomasz Tunguz, a former engineer who is now a venture capitalist at Theory Ventures. “SpaceX needs to consider in-orbit computing, where radiation, thermal cycling, launch mass, power generation, and heat rejection all become existential design constraints.”
Tunguz said a potential merger has caught the attention of tech enthusiasts in Silicon Valley, but acknowledged that a deal of this size would be “complicated.”
Representatives for SpaceX and Tesla did not respond to requests for comment.
Musk, the world’s richest man, is preparing to launch SpaceX’s roadshow next week as he tries to sell Wall Street on the promises of the 24-year-old company, which is already a massive conglomerate. It consists of xAI, which includes the reusable rocket business, the Starlink internet satellite service, and the social media site X, formerly known as Twitter. SpaceX also has a deal to buy AI coding startup Cursor for $60 billion.
“I think this is proven by Elon,” said Tejpaul Bhatia, a longtime SpaceX investor and CEO of Nebex, a startup that creates the financial infrastructure for space-related transactions. “Parallel entrepreneurship seems to work for him.”
large overlap
Tesla and SpaceX spent years pooling resources and even We share the staff.
Musk sits on both boards, as does his brother Kimbal and venture capitalist Ira Ehrenpreis, founder of DBL Partners. SpaceX board members Antonio Gracias and Steve Jurvetson previously served on Tesla’s board of directors. Charles Kuehmann also serves as vice president of materials engineering for Tesla and SpaceX. Apple It was founded a decade ago and is known to have played a key role in fixing major design issues.
In January, Tesla announced that it invested $2 billion in xAI. These shares became shares of SpaceX after the company merged with xAI the following month.
SpaceX said in its statement: prospectus It said the company is purchasing Tesla’s Megapack battery energy storage systems worth $697 million in 2024 and 2025 to power xAI-owned and operated data centers in the region surrounding the Colossus facilities in Memphis, Tennessee. SpaceX also said it spent $131 million on Tesla Cybertrucks purchased in 2025 at the manufacturer’s suggested retail price.
Previous transactions between the companies have included Tesla selling solar equipment and car parts to SpaceX, Tesla using SpaceX private jets, and Tesla relying on SpaceX to develop a special alloy for the Cybertruck.
Suppliers sometimes view Musk’s companies as major customers. In 2024, Nvidia agreed to redirect a $500 million GPU order from Tesla to xAI at Musk’s request.
A Tesla Cybertruck passes by SpaceX facilities on Monday, April 13, 2026 in Hawthorne, California, USA.
Ethan Swap | Bloomberg | Getty Images
Legal experts said the SpaceX-Tesla merger probably wouldn’t raise antitrust issues but could raise concerns among shareholders in each of the two companies. Questions such as which company will be the parent company, how the stock will be exchanged, and who will determine the appropriate price are among the thorny challenges.
What’s almost certain is that Musk won’t have to worry about the SpaceX board backing down, given that the CEO has 85% voting power. In the risk factors section of its prospectus, SpaceX notes that it is a “controlled company,” which allows exceptions when it comes to governance rules and means that Class A shareholders “will not be afforded the same protections afforded to shareholders of companies subject to all of Nasdaq’s corporate governance requirements.”
Musk may be the person who will benefit most from the merger between SpaceX and Tesla.
SpaceX tied Musk’s compensation awards to two milestones: reaching a market cap of $7.5 trillion and colonizing Mars with a population of at least 1 million. Tesla shareholders, meanwhile, approved a pay plan consisting of 12 tranches late last year, with each payout tied to market capitalization gains and operational achievements.
Ross Gerber, CEO of investment firm Gerber Kawasaki, previously told CNBC that a merger of SpaceX and Tesla would allow Musk to realize his dream of running a large company, and that it would make it easier to raise and borrow the types of cash needed to compete in the artificial intelligence space. Google.
Bhatia said the merger will be more about recognizing the opportunity in SpaceX’s core market.
“I believe the space market is huge right now,” Bhatia said. “And it’s only going to get bigger after SpaceX’s IPO.”
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