① According to informed sources, SpaceX and Tesla have already shared a range of resources, and Musk has discussed with colleagues the possibility of merging the two companies; ② Although market rumors about a potential merger between SpaceX and Tesla have been swirling for months, Musk’s own comments on the matter have undoubtedly brought the prospect of such a merger closer to reality.
Cailian Press, May 27 (Editor: Bian Chun) — As Musk prepares to take his second trillion-dollar company public, speculation is intensifying that his ultimate goal is to merge the two entities.
SpaceX formally filed for an IPO last Wednesday and is set to begin trading on Nasdaq in just over two weeks, with a target valuation of up to $1.7 trillion. SpaceX’s business spans reusable rocket operations, the Starlink satellite internet service, and xAI.
Tesla currently has a market capitalization of approximately $1.6 trillion, meaning Musk would simultaneously lead two companies ranked among the top ten most valuable in the United States.
According to informed sources, the two companies have already shared a range of resources, and Musk has discussed with colleagues the possibility of merging them.
Although market rumors about a potential merger between SpaceX and Tesla have been swirling for months, Musk’s own comments on the matter have undoubtedly brought the prospect of such a merger closer to reality.
A current Tesla employee stated that many employees at the electric vehicle maker have long anticipated that such a transaction would eventually occur, and the topic has been openly discussed within the company. Another source close to the company noted that shared challenges related to power and computing capacity have driven frequent collaboration between the two firms.
Although a company that launches rockets based on government contracts may seem to have little in common with an electric vehicle manufacturer, both are increasingly focused on artificial intelligence and the talent and computing resources required to build AI infrastructure and services. More than three-quarters of SpaceX’s $10.1 billion capital expenditures in the first quarter were AI-related, while Tesla stated in its latest earnings report that its capital expenditures this year will roughly triple to exceed $25 billion.
“Tesla must run powerful AI systems in moving vehicles under stringent constraints on power, thermal management, latency, reliability, and cost,” said Tomasz Tunguz, a former engineer and now a venture capitalist at Theory Ventures. “SpaceX must consider on-orbit computing, where radiation, thermal cycling, launch mass, power generation, and heat dissipation become critical design constraints.”
Tunguz said the potential merger has already drawn attention from tech enthusiasts in Silicon Valley, though he acknowledged that a transaction of this scale would be “complex.”
Close Ties
Tesla and SpaceX have been sharing various resources, including personnel, for years.
Elon Musk and Ira Ehrenpreis, founder of DBL Partners and a venture capitalist, both serve on the boards of directors of the two companies. Kimbal Musk, Elon’s brother, currently serves as a Tesla director and previously served on SpaceX’s board. Antonio Gracias and Steve Jurvetson, members of SpaceX’s board, have also previously served on Tesla’s board. Charles Kuehmann holds the position of Vice President of Materials Engineering at both Tesla and SpaceX; he joined from Apple a decade ago and is known for playing a critical role in resolving key design challenges.
In January this year, Tesla disclosed that it had invested USD 2 billion in xAI. The following month, after SpaceX merged with xAI, these shares became holdings in SpaceX.
In its prospectus, SpaceX stated that in 2024 and 2025, it purchased Tesla Megapack battery energy storage systems worth $697 million to power data centers owned and operated by xAI in the Memphis, Tennessee area surrounding the Colossus facility. SpaceX also reported purchasing Tesla Cybertrucks worth $131 million in 2025 at manufacturer’s suggested retail price.
Previous transactions between the two companies include Tesla selling solar equipment and automotive components to SpaceX, Tesla using SpaceX’s private aircraft, and Tesla relying on SpaceX to develop a special alloy for its Cybertruck.
Suppliers sometimes view Musk’s portfolio of companies collectively as a single major client. In 2024, at Musk’s request, NVIDIA agreed to transfer a USD 500 million GPU order from Tesla to xAI.
Moreover, according to statistics, the term “Tesla” appears 87 times in SpaceX’s IPO prospectus. Considering that “Musk” appears only 174 times, this frequency is notably high, underscoring the close ties between the two companies.
Shortly after SpaceX released its IPO prospectus, Dan Ives and his team at Wedbush Securities, a prominent U.S. investment bank, issued a research report forecasting that SpaceX and Tesla would complete a merger by 2027.
He noted that Tesla already holds shares in SpaceX, and the jointly constructed Terafab facility further binds the two companies together.
Could this raise antitrust concerns?
Legal experts say the merger between SpaceX and Tesla is unlikely to raise antitrust concerns but could prompt worries among shareholders of both companies. Key challenges include determining which company will become the parent entity, how stock conversions will be structured, and who will set an appropriate exchange price.
One thing is almost certain: Musk does not need to worry about opposition from SpaceX’s board, as the CEO controls 85% of the voting power.
Musk could emerge as the biggest beneficiary.
Elon Musk himself may be the biggest beneficiary of a potential merger between SpaceX and Tesla.
SpaceX has tied Musk’s compensation award to two milestones: achieving a $7.5 trillion market capitalization and establishing a colony on Mars with a population of at least one million. Meanwhile, Tesla shareholders approved a new compensation plan at the end of last year that includes 12 tranches of awards, each linked to specific market valuation and operational targets.
Ross Gerber, CEO of investment firm Gerber Kawasaki, previously stated that a merger between SpaceX and Tesla would fulfill Musk’s ambition of running a large-scale company and make it easier for him to raise and borrow the capital needed to compete in AI against companies like Google.
Editor/Jayden