Elon Musk indicated on Tuesday that combining SpaceX and Tesla would be "a good idea," confirming that special committees from both companies have been formed to explore a potential merger. The announcement sent SpaceX's shares up 8% in extended trading. Musk said the move would accelerate development of superintelligence software, chip design, robotics and orbital infrastructure, citing the growing overlap between the two firms. He added that the committees, composed of independent directors, would ultimately decide whether a transaction proceeds, as shareholder approval would also be required.
The proposal comes as SpaceX reported a 161% increase in third-quarter revenue to $14.58 billion, driven largely by AI-related services. The company's data-center business, which rents capacity to firms such as Anthropic, Google and Reflection AI, saw revenue surge nearly tenfold to $7.56 billion. SpaceX's CFO Bret Johnsen noted that capital expenditures are expected to reach $35 billion to $40 billion in the fourth quarter, reflecting continued investment in AI infrastructure. The company also posted a net income of $4.4 billion, up from a $1.1 billion loss a year earlier, and reported adjusted earnings of 45 cents per share, exceeding analyst expectations.
Starlink, SpaceX's satellite-internet division, added 13.6 million subscribers in the quarter, surpassing analyst forecasts of 12.19 million. However, average monthly revenue per subscriber declined to $69 from $99 in 2023 as the service expands into lower-income markets. The company projects that geographic diversification may further pressure revenue per user over time. Starship, SpaceX's next-generation reusable rocket, remains in development and is expected to support higher-capacity Starlink launches and orbital AI computing.
Musk, who owns nearly 20% of Tesla and just under half of SpaceX, has previously floated the idea of a merger, citing strategic synergies in AI and superintelligence development. Analysts suggest the combination could give Musk greater control over the merged entity. A person familiar with the discussions told Reuters that talks began recently and could result in SpaceX acquiring Tesla, though no terms have been finalized. Tesla shares rose 1.8% in extended trading following the announcement.

