Elon Musk backs SpaceX and Tesla merger

Speaking to investors on Tuesday evening, Mr Musk revealed that Tesla and SpaceX had established special committees of independent directors to examine the proposed merger.

However, the world’s richest man cannot take part in the discussions because of his significant ownership stakes in both companies.

Mr Musk said: “I think it would be a good idea, but it’s really up to the special committees of both companies.”

He added: “Because I’m a conflicted party, I can’t actually be in the discussions of the special committees.”

The billionaire described the process as “an odd kabuki dance where two groups of people are talking, and I can’t be in the conversation.”

The potential merger comes as SpaceX reported a dramatic surge in revenue and profits, driven largely by its expanding artificial intelligence operations.

Revenue jumped 161 per cent to $14.6billion in the latest quarter, comfortably beating analysts’ expectations of around $12.7billion.

The company also recorded a $4.4billion net profit, compared with a loss of approximately $1billion during the same period last year.

SpaceX’s artificial intelligence division was the biggest driver of growth, with revenue soaring from $813million to $7.56billion in just 12 months.

The division also returned to profitability, posting an operating profit of $431million after recording a $1.7billion loss a year earlier.

Its data centres are now being leased to rival AI companies, including Anthropic, highlighting the growing demand for computing power.

Meanwhile, Starlink, SpaceX’s satellite internet service, generated $5.2billion in revenue, a 69 per cent increase compared with last year.

The service had attracted 13.6million subscribers by September 30, while revenue from rocket launches climbed six per cent to $1.77billion.

Despite Mr Musk’s enthusiasm, no merger agreement has been reached, with the final decision resting with the independent committees and potentially shareholders.

Despite Mr Musk’s enthusiasm for the deal, he urged caution about its prospects. “Some people out there assume that a SpaceX and Tesla merger is a certainty, and I think that would be overstating it,” he said.

Any combination would need backing from at least 50 per cent of Tesla’s shareholders, Mr Musk noted. The committees were formed at the request of investors in both companies.

Speculation about a potential deal has been building for weeks. Barclays suggested last week that a merger could be announced as early as December, according to Reuters.

Mr Musk pointed to overlapping interests between the two businesses as justification for combining them, citing opportunities in “super intelligence software, chip design, the TeraFab, obviously robotics.”

SpaceX listed on the stock market in June at a valuation of $1.8trillion, an event that made Mr Musk the world’s first trillionaire.

His estimated fortune now stands at $920billion. Shares have declined since reaching a high shortly after the flotation but edged up more than 6 per cent following Tuesday’s results. Tesla’s stock rose 1 per cent.

Before exploring a tie-up with Tesla, Mr Musk had already folded his AI venture xAI and social network X into SpaceX. The company’s AI business has flourished by selling data centre capacity to firms such as Anthropic.

Tesla has also been in the spotlight recently, having unveiled its long-awaited Roadster last week. The vehicle used compressed-air thrusters to launch off a ramp and perform a mid-air manoeuvre during the showcase.