In brief: It appears that Elon Musk's corporate empire could be heading for another major reshuffle. Tesla and SpaceX have formed special committees to explore a merger, confirming months of speculation about a combination of his two biggest companies. Musk likes the idea, though he cautions that investors shouldn't treat it as a done deal.
Speaking during SpaceX's third-quarter earnings call on October 20, Musk said independent directors are examining a potential agreement. He's staying out of their discussions because his position at both firms creates a conflict of interest. The committees have yet to agree on terms.
"I do think there's a lot of merit to combining the companies," Musk said.
The proposed combination would bring Tesla's electric vehicles, energy business and robotics efforts together with SpaceX's rockets, satellite internet and AI operations. Bloomberg reports that it would rank as the largest corporate merger ever. Musk pointed to cooperation on superintelligence software as a reason to bring the businesses together.
Any proposal would need shareholder support, and Musk acknowledged that the process might not produce a deal.
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"Some people out there assume that a SpaceX and Tesla merger is a certainty," he said. "I think that would be overstating it."
In February, SpaceX absorbed xAI, bringing Musk's AI business into the rocket and satellite company. That merger was tied to his ambition to put AI data centers in orbit, enabling the combination of launch capacity, communications infrastructure and AI development within one organization.
Tesla and SpaceX have also been working on the Terafab advanced chipmaking project. Musk pitched the venture as a way to supply the processors needed for autonomous vehicles, humanoid robots and space computing.
– Elon Musk (@elonmusk) October 21, 2026
The discussion came alongside strong SpaceX results. The company posted quarterly profit of $4.4 billion on revenue of roughly $14.6 billion, up 161% from a year earlier. AI became its largest business by revenue, while Starlink remained its biggest profit generator.
Musk also told analysts that SpaceX plans to catch both Starship and its booster with mechanical arms when they return to the launch site during next month's flight. Successfully recovering both would mark a major step toward making the entire rocket reusable.
"The only way that we can extend consciousness beyond Earth on a sustained basis is with a fully reusable orbital launch vehicle," Musk said, adding that a successful attempt would be "a massive technology milestone."
SpaceX shares gained nearly 5% in late trading following the results, while Tesla rose just over 2%.
