Tesla (TSLA) and SpaceX Merger Under Active Consideration With $3.5T Valuation

Elon Musk has stated that a merger between Tesla (TSLA) and SpaceX is actively being considered. He highlighted the potential benefits but noted that the merger is not guaranteed, as it requires shareholder approval and agreement by special committees from both companies. Tesla is currently valued at roughly $1.5 trillion, while SpaceX is valued at about $2 trillion, making the combined entity one of the largest mergers in history.

SpaceX shares rose 8% in after-hours trading following the announcement, while Tesla shares increased by 2%. SpaceX's profitable cloud computing services generated $7.5 billion in revenue in the latest quarter, with Starlink contributing $5.2 billion. However, SpaceX has reported a loss of $1.1 billion so far this year. The companies are already collaborating on projects such as Terafab, a joint chip manufacturing effort, and SpaceX has recently expanded into AI infrastructure and cloud services for other tech companies.

Musk emphasized that he is not part of the special committees due to his role as CEO of both companies and that at least 50% of Tesla shareholders must approve the merger, describing this as a significant hurdle. The merger could streamline work on chips, AI, and software across the two companies. This development matters for investors because the merger could transform the combined company's scale and structure, potentially impacting future revenue and collaboration strategies between Tesla and SpaceX.