Author: Jose Antonio Lanz (Decrypt)
Compiled by DeepChain TechFlow
DeepInsight Summary: Elon Musk’s two flagship companies, SpaceX and Tesla, have each established independent special committees to formally initiate an evaluation of the feasibility of a merger. If this all-stock transaction is approved by shareholders, it would create a tech empire valued at up to $3.5 trillion, integrating rocket launches, low-earth-orbit satellite networks, custom chip wafer manufacturing, Robotaxi services, and physical robotics—fundamentally reshaping the power landscape of Silicon Valley as it moves toward the superintelligence singularity.
On Tuesday, Musk said that SpaceX and Tesla each established special committees composed of independent directors to explore a potential merger, but no specific terms have been agreed upon yet.
• A merged company valued at approximately $3.5 trillion will own the Grok chatbot, the X platform, Starlink, the Terafab chip manufacturing project, the Starmind orbital data center initiative, as well as Tesla’s Robotaxi and Optimus humanoid robot businesses.
• Any transaction requires support from 50% of all issued shares of Tesla, which Musk called a “quite high threshold.” Tesla’s annual shareholder meeting is scheduled for December 3.
Elon Musk said on Tuesday that the boards of SpaceX and Tesla have each established special committees to explore merging his two largest companies. The deal would bring together rockets, electric vehicles, humanoid robots, social media, and the Grok chatbot into a single company valued at approximately $3.5 trillion.
Elon Musk said during SpaceX's Q3 earnings call: "I do believe there is significant value in merging the two companies, as we are nearly at the brink of the superintelligence singularity." The "singularity" is Silicon Valley's term for the point at which AI surpasses human intelligence and evolves at a speed beyond human capability.
He then listed the resources the two companies would share: “superintelligent software, chip design, the obvious Terafab, robotics, the ability to deliver payloads to orbit via the Starmind constellation, and network connectivity.”
In simple terms, this means AI models, custom chips, large-scale chip manufacturing facilities, robots, and constellations of satellites operating as orbital data centers.
If the merger succeeds, a company controlled by a single individual with majority voting rights will simultaneously own the leading AI chatbot, the social network that provides its data, the satellite constellation that enables its connectivity, the factories that manufacture its chips, and the cars and robots it powers.
No agreements have been signed yet, and Musk warned that claiming the merger is inevitable would be an exaggeration. If you hold an S&P 500 index fund, you already indirectly own a small portion of Tesla (not SpaceX), and in an all-stock transaction, these shares would likely be exchanged for shares in the newly merged company.
This will be the third business integration since Musk acquired X (formerly Twitter) through xAI in March 2025. In February this year, shortly after Tesla invested approximately $2 billion in xAI, SpaceX absorbed xAI at a $250 billion valuation; in June, SpaceX completed the largest IPO in history and successfully went public.
SpaceX announced on Tuesday that its third-quarter revenue reached $14.58 billion, significantly exceeding analysts' expectations of $12.72 billion. The company also achieved its first quarterly profit since going public, primarily driven by leasing the computing power of its AI server clusters to companies such as Anthropic and Google.
Figure 1: Tesla stock price chart, source: TradingView
Meanwhile, Tesla's total revenue for the third quarter reached $28.1 billion, as its core automotive sales business continues to face increasing pressure from Chinese competitors. The company is fully betting on the launch of mass production for its Cybercab autonomous ride-hailing network next year.
Figure 2: SpaceX stock price chart, source: TradingView
However, the merger also brings significant conflicts of interest and regulatory hurdles. As publicly traded shareholders of Tesla, they would have to accept an aerospace entity with extremely high capital intensity and a propensity for aggressive balance sheet expansion; regulators are expected to subject such a monopoly, entirely controlled by a single private individual, to an extremely stringent and comprehensive antitrust review.
The independent special committees of both companies will issue their evaluation reports over the coming weeks, and the final proposal is expected to be voted on at the shareholders' meeting in December.