Musk says SpaceX and Tesla committees explore merger, no terms agreed

Elon Musk said on SpaceX’s earnings call on Tuesday that special committees at both companies are exploring a potential merger and that no agreement on terms has been reached.

Musk presented the results alongside SpaceX President Gwynne Shotwell and CFO Bret Johnsen at the company’s Starlink factory in Texas, The Guardian reported, in what was only SpaceX’s second-ever public earnings release. London Business News said the result compared with a $1.1bn loss in the same quarter last year and comfortably exceeded expectations.

Musk told investors the combination would be a good idea but cautioned that the deal is not inevitable and might never happen, The Guardian and London Business News said. He said he is a conflicted party and cannot take part in the committees’ discussions, which consist of independent directors and were formed at shareholders’ request. London Business News described Musk’s remarks on Tuesday as the first confirmation that special committees had been set up at both companies. Musk said, “I think some people out there assume that a SpaceX and Tesla merger is a certainty and I think that would be overstating it.”

London Business News reported that Musk owns nearly a fifth of Tesla and just under half of SpaceX, while Electrek.co put his Tesla stake at around 22% after restoration of his pay package and said he controls more than 50% of SpaceX voting shares. London Business News tied the stakes to the potential for a merged entity spanning from factory floors to low-Earth orbit. Electrek.co said the stake had shrunk because Tesla sold shares in offerings and granted shares to employees before its restoration.

The Guardian reported that Musk said approval of 50% of all Tesla shareholders is required, while Electrek.co said the vote needs 50% of all outstanding shares rather than a majority of shares voted. The Guardian attributed the requirement to Musk on the earnings call. Electrek.co tied the requirement to Tesla’s auto-vote procedure, which lets shareholders instruct automatic votes aligned with board recommendations and offers no option to vote against them, and said retail shareholders own a bigger percentage of Tesla than at most companies and tend to vote in low numbers.

The Guardian said SpaceX’s Super Intelligence segment drew $7.6bn and outperformed its Connectivity business, while London Business News put AI revenue at $7.56bn, almost tenfold higher, from data-centre rentals to developers including Anthropic, Google and Reflection AI. The Guardian described Super Intelligence as SpaceX’s AI segment, highlighted at the Starlink factory in Texas with President Gwynne Shotwell and CFO Bret Johnsen present.

The Guardian said SpaceX shares had fallen about 8% for the year and rose 2% in after-hours trading, while London Business News reported SpaceX shares up 8% in extended trading and Tesla up 1.8%. The outlets gave different figures for the trading reaction after the earnings call, with one citing after-hours movement and the other extended-trading gains for both SpaceX and Tesla.

London Business News reported that SpaceX’s capital expenditure nearly tripled to $19.6bn in the third quarter and that CFO Bret Johnsen said spending could reach $35bn-$40bn in the fourth quarter. Musk said he expected annual recurring revenue of between $500bn and $1tn by the end of 2027. The outlet described SpaceX’s financial engine as resembling a cloud-computing provider and said its long-term plans depend on Starship becoming a reliable, reusable vehicle able to carry infrastructure into orbit.

Starlink had 13.6mn subscribers in the third quarter, exceeding analysts’ expectations of 12.19mn, with gains across consumer, aviation, maritime, enterprise and government customers. Average monthly revenue per subscriber fell from $99 in 2023 to $69 in the latest quarter.

Starship has yet to enter commercial service, but its success is central to deploying more powerful Starlink satellites and establishing computing infrastructure in space, and development remains expensive and technically demanding. Musk cited superintelligence software, chip design, Terafab, robotics, Starmind constellation mass-to-orbit and connectivity as overlapping technologies. The chip-manufacturing venture Terafab is expecting a first test chip around May or June of next year, with volume production due in the third quarter of 2028.

A person familiar with the talks told Reuters that discussions began in recent weeks, could result in SpaceX acquiring Tesla, and that Tesla worked with an investment bank, London Business News reported. Electrek.co stated that Musk wants total control and needs $1 trillion to control a robot army, and that Tesla’s pay package automatically delivers shares to him in a merger regardless of operational milestones, diluting other shareholders. Electrek.co frames the pay package as illegal and says it could produce shares out of thin air. The outlet said the pay committee signed off on the trillion-dollar package.

Electrek.co stated that Musk is not officially allowed in the merger talks, nor is his brother Kimbal Musk, who is not deemed independent, but Musk said a merger is a good idea because “we are pretty much in the superintelligence singularity.” The outlet said Musk’s Tesla stake had shrunk because Tesla sold shares in offerings and granted shares to employees, and that he gave himself super-voting shares before SpaceX goes public so he would not have to listen to anyone else. It also said Musk has objected for more than a decade to Tesla’s public status and shareholder accountability, despite taking SpaceX public.

Electrek.co said Tesla marketed the pay package with promises of shares if Tesla delivered a million robots, a million robotaxis and other operational milestones, and that Musk planned to promise a million colonists on Mars as part of SpaceX’s pay package. The outlet said SpaceX entered the Nasdaq 100 just days after its IPO (initial public offering) because Musk got the rules changed, and that both firms are in major stock indices held by retirement funds. The deal could reduce the retirement savings of people invested in those indices, and retirement funds holding Tesla would also face dilution, Electrek.co said.

London Business News said a merger could give Tesla shareholders access to a broader technological platform but could also expose them to greater capital demands and priorities extending beyond vehicle sales. Will Rhind, chief executive of GraniteShares, said SpaceX delivered the quarter the bulls wanted on the top line and that the story is now all about AI.

Tesla will release its latest earnings this week, with Musk set to deliver the quarterly report on Wednesday, The Guardian said. The outlet described Tesla as the second-most valuable part of Musk’s empire. Tesla also unveiled its Roadster 2 electric sports car in a demonstration using pressurized air tanks to briefly lift the vehicle off the ground and perform aerial stunts.

Musk contributed $366m in political spending this election cycle, backing Republican-aligned Super Pacs and seeking to influence key midterm races, The Guardian reported. He agreed earlier this month to co-lead a Pentagon project on the future of warfare, and he pledged to give every child in the United States one SpaceX stock next year through President Donald Trump’s Trump accounts initiative. Musk criticized traditional aid organizations and said he deserves credit for dismantling USAID, which he described as the world’s largest single humanitarian aid provider. The Pentagon project marks a return to government work after Musk’s time leading the Department of Government Efficiency (Doge).

This year, OpenAI and Anthropic announced large investments in their grant-making and non-profit arms, according to The Guardian. Earlier this week, Anthropic said it would donate 5% of its shares to a new public benefit fund within the company.

Ukrainian President Volodymyr Zelenskyy accused SpaceX last week of restricting access to its military-grade Starshield internet service, The Guardian reported. The outlet said the alleged Starshield outage caused failed Ukrainian combat missions and increased the country’s exposure to Russian drone attacks. Musk denied responsibility, saying the US government controlled Starshield, not SpaceX, and the White House also denied interfering. The Guardian reported that the Wall Street Journal, citing unnamed officials, said Musk personally ordered throttling of Starshield, and Musk faced no questions about the reports on the earnings call.

Electrek.co recounted the 2016 SolarCity deal, in which solar roof tile demonstrations helped win shareholder approval before Tesla absorbed billions of dollars of debt and killed the product in August 2026. Electrek.co describes the 2016 SolarCity pitch as using solar roof demonstrations that never reached significant market scale, and compares the episode to Musk’s Twitter deal and debt shuffle into SpaceX before an IPO. The outlet also said Musk overpaid by $30 billion for Twitter, funded the deal with debt, moved that debt into SpaceX and later used an IPO to shift it to public investors.