Elon Musk has confirmed that SpaceX and Tesla are exploring a potential merger that could create a technology conglomerate valued at approximately $3.5 trillion, making it the largest corporate combination in history.
Speaking during a SpaceX earnings call on Tuesday, Musk said both companies had established special committees to evaluate a possible agreement, although no proposal had been finalised.
Musk said combining the companies could deliver significant benefits through their complementary expertise in artificial intelligence, robotics, manufacturing and energy infrastructure.
The proposed combination would bring Tesla's electric vehicles, autonomous driving systems and humanoid robots together with SpaceX's rockets, satellites, telecommunications networks and data centres.
However, any agreement would require shareholder approval, including support from at least 50 percent of Tesla shareholders.
Musk acknowledged that securing such backing would represent a significant challenge and cautioned against treating the merger as inevitable.
Investment analysts expressed differing assessments of its likelihood.
David Nicholson of The Futurum Group predicted an eventual merger, while Dan Sheehan of Telos Wealth Advisors highlighted uncertainty surrounding the valuation and ownership structure of the combined business.
The transaction could also increase Musk's voting influence while potentially attracting additional regulatory scrutiny.
The discussions follow Musk's broader consolidation of his businesses, including SpaceX's acquisition of xAI and X before its public listing in June.
SpaceX reported its first quarterly profit on Tuesday, recording $4.4 billion in net income for July through September, compared with a $1.05 billion loss a year earlier.
Growth in artificial intelligence and satellite internet operations contributed to the turnaround.
Investors responded positively to the merger discussions, with SpaceX shares rising more than 8 percent in after-hours trading and Tesla shares also gaining.
Analysts suggested that combining the companies' technological capabilities could accelerate innovation, although Tesla customers might experience limited immediate changes.
The potential agreement could also support Musk's longer-term ambitions in space exploration, including establishing a self-sustaining settlement on Mars.
For now, the merger remains under consideration, with its future dependent on committee recommendations and shareholder approval.