Tesla and SpaceX discuss merger; Tesla approval requires support from 50% of shares
Key Facts
Elon Musk said on Tuesday that Tesla and SpaceX had formed special committees to discuss a potential merger, adding that Tesla's approval requires support from 50% of all shares. According to his remarks reported by TechCrunch, that percentage is calculated against total shares, rather than only those participating in the vote. Reuters cited a person familiar with the matter as saying the talks began in recent weeks and could lead to SpaceX acquiring the electric vehicle maker. The source added that Tesla is using an investment bank for advice on the ongoing discussions between the two companies. But Musk said the committees had not agreed on deal terms and might never reach an agreement. Explaining his conflict of interest, he said: "I can't actually participate in the special committee discussions."
The discussions follow an investment overlap between the companies that began with a Tesla commitment to invest in xAI Holdings, according to Tesla's amended annual report. That right became a right to acquire Class A common shares in SpaceX after the latter acquired xAI. On the operational side, Reuters examined in its analysis the possibility of using Tesla batteries and energy storage products to support SpaceX's growing electricity and data center needs. The agency also pointed to SpaceX's business ties with U.S. military and intelligence institutions and the U.S. space agency NASA, and Tesla's reliance on its Shanghai factory. It said combining these businesses could draw additional scrutiny from U.S. regulators and national security officials.
The disclosure of the merger talks coincided with SpaceX reporting revenue of $14.6 billion in the third quarter of 2026, according to its earnings filing with the U.S. Securities and Exchange Commission. Revenue rose 161% from $5.6 billion in the same period a year earlier. Reuters reported that most of the increase in artificial intelligence revenue came from renting data center capacity to developers including Anthropic, Google and Reflection AI. The superintelligence segment generated quarterly operating profit of $431 million, according to the company's official filing. SpaceX's nominal computing capacity reached 1.7 gigawatts by the end of September as it expanded its computing infrastructure business.
In its connectivity segment, SpaceX reported quarterly revenue of $5,248 million, according to the same earnings filing. The segment's operating profit totaled $2,367 million during the quarter, exceeding the operating profit reported by the superintelligence segment. In its launch business, the company announced the success of Starship's first revenue-generating mission during the third quarter. The mission carried 26 Starlink satellites, the company said in its quarterly performance filing. In the market, Tesla shares rose 1.8% in extended trading following the announcement of merger talks on Tuesday, according to Reuters.
SpaceX's total capital expenditure reached $19,593 million during the third quarter, according to the earnings filing. The company's cash and cash equivalents stood at $51,294 million at the end of September. For the fourth quarter of 2026, the company expects capital expenditure of between $35 billion and $40 billion, Reuters reported, citing Chief Financial Officer Bret Johnsen. At the Terafab joint project with Tesla, the companies aim to bring an initial test chip using static random-access memory circuits into operation around May or June next year. The chip is scheduled to operate at the project's research facility in Austin, according to Musk's remarks reported by Reuters.
Musk described the target dates for the Terafab project as highly ambitious, stressing uncertainty over meeting them. On achieving those timelines, he said: "We don't know whether we'll actually achieve that or not." For Tesla's next financial milestone, the company scheduled its quarterly earnings call for Wednesday, October 21, 2026, according to an investor relations statement. The call will take place at 5:30 p.m. Eastern Time to present third-quarter results. Tesla's annual shareholder meeting is scheduled for December 3, 2026, according to the proxy statement the company filed with the U.S. Securities and Exchange Commission.