Tesla and SpaceX form board committees to explore $3.5T merger around AI

Tesla and SpaceX have each formed special committees of independent directors to explore a potential merger, Elon Musk disclosed on SpaceX's third-quarter earnings call. The combination would rank as the largest corporate tie-up of all time, uniting companies with a combined market value approaching $3.5 trillion. Musk endorsed the idea but stressed it is not certain, citing potential benefits in AI software, chips, robotics and orbital infrastructure, and noted he is recused from committee discussions due to conflict of interest. The AI overlap is the central rationale: SpaceX's AI division generated roughly $7.6 billion in third-quarter revenue, overtaking Starlink as the largest revenue source and growing ninefold year over year. Total quarterly revenue reached $14.58 billion, up 161% year over year, with net profit of about $4.4 billion. Musk pointed to Terrafab, a chip manufacturing joint venture, as an example of merger synergy, with first test chip expected around May or June 2027 and mass production by the third quarter of 2028. He framed the merger around a "superintelligence singularity" and noted that 50% of all Tesla shares would need to approve, calling it a "high hurdle". No formal agreement has been announced and regulatory scrutiny is expected. Analyst Gene Munster of Deepwater Asset Management sees a 95% chance of a deal within two years, while Barclays suggested a merger could be announced before Tesla's annual shareholder meeting in December. SpaceX shares rose about 4% to $154 in after-hours trading, while Tesla climbed 1.2%. The analysis notes that SpaceX's AI division surpassing Starlink reframes the merger as consolidating large-scale AI and compute operations, with Terrafab already binding the companies at the silicon level.

(Source：Vector Wire)