Elon Musk rarely dodges a bold idea. Yet on Tesla’s latest earnings call he danced around one that has Wall Street buzzing. When analysts pressed him on a possible combination with SpaceX, his answer carried weight. “Well, I mean, as you can tell from all the many collaborations on so many fronts with SpaceX, there’s more and more overlap, especially with the Terafab, that’s really going to be a gigantic project,” he said, according to Gizmodo. But obviously, you know, we can’t talk about combining companies on earnings calls.
The remark landed like a flare. It came hours after Tesla reported another quarter of heavy artificial-intelligence spending that pushed free cash flow negative. Revenue beat estimates. Earnings per share did not. The stock slipped. And investors, already on edge, heard something else in Musk’s words. A signal. Maybe even a plan.
SpaceX, now public after a blockbuster initial offering this summer, trades under the ticker SPCX. Its market value has seesawed since debut. Tesla, long the more visible of Musk’s two flagship companies, sits at the center of electric vehicles, robotics and autonomous driving. The two outfits already share talent, technology and ambition. Starlink terminals could blanket remote roads for Tesla’s robotaxis. Grok, the chatbot born inside what became part of SpaceX, may soon animate Optimus humanoid robots. The Terafab chip factory in Texas stands as their most visible joint project yet. Overlap keeps growing. So does speculation.
Gene Munster noticed. The co-founder of investment firm Deepwater Asset Management tracks both companies closely. Before the call he put the odds of a deal within a few years at 80 percent. Afterward he raised it to 90. He posted the update on X. Markets reacted in kind. Betting odds on prediction platforms jumped. So did chatter among longtime Tesla holders who sense their patience may soon be tested.
But a merger would not arrive without friction. Musk controls roughly 85 percent of SpaceX’s voting power. His stake in Tesla hovers near 20 percent, even after recent moves to increase it. That imbalance creates governance headaches. Tesla shareholders might demand a premium. SpaceX investors could worry about dilution. JPMorgan analysts called the idea “strategically coherent” on paper yet warned of “substantial regulatory and governance obstacles,” as reported by CNBC. They outlined four possible structures. All-stock. Holding company. Cash-and-stock hybrid. Or a phased approach. Each carries its own legal and tax land mines.
Regulatory scrutiny would be intense. Antitrust officials have already examined Musk’s sprawling empire. A union that creates what some call Musk Inc. — a four-trillion-dollar technology and aerospace giant — would draw even sharper focus. The New York Times explored that prospect in June. It noted that many fans and investors already picture the two businesses joined, with Musk at the helm of a conglomerate that stretches from Mars to Main Street. The New York Times captured the mood. Some expect it. Others fear the conflicts that could arise.
Recent developments have only sharpened the debate. SpaceX’s IPO prospectus flagged the possibility of major acquisitions or partnerships, including those that might involve issuing new equity or non-voting shares. Reuters Breakingviews examined the dynamics in early June. It argued a deal may prove too big to stop, given Musk’s control and the companies’ overlapping goals. Reuters laid out the case clearly. Shareholders would struggle to block him. Texas domicile weakens their leverage.
Yet timing matters. Tesla burns cash on AI infrastructure at a record pace. Musk told the earnings call this is a massive capital-expenditure year. He directed his team to spend fast without becoming too wasteful. The result? Construction and production growth on a scale he compared to America’s industrial surge during World War II. Bold claims. They come as Tesla pushes robotaxis, Optimus production and energy-storage megafactories all at once.
SpaceX, fresh from its public debut, brings satellite internet, reusable rockets and a valuation that once topped $200 billion before settling lower. Its Starlink network already complements Tesla’s connectivity needs. The two companies deepened ties earlier this year through an investment and framework agreement. Tesla’s general counsel highlighted those beneficial transactions during the call, per a Yahoo Finance video recap. They work together on Terafab and Digital Optimus projects. The partnership appears genuine. The question is whether it stays that way.
Investors submitted questions ahead of the earnings release. Many wanted clarity on a merger. Musk deferred. He noted there is a time and place for such talk. An earnings call is not it. That deflection only fueled more speculation. Business Insider captured the investor mood two days earlier. Shareholders took to online forums demanding answers. Longtime holder Ross Gerber expected the topic to surface. It did. Sort of.
Analysts at JPMorgan and elsewhere see strategic logic. Unified vision under one leader. Shared engineering talent. Combined AI and compute resources. The possibility of computing on the moon or distributed AI pods that turn Supercharger stations into edge data centers. Musk floated concepts like Megapod — modular AI units that pair Tesla hardware with other systems. He envisions using underutilized power across the company’s global network. Those ideas sound futuristic. They also hint at infrastructure that could span both organizations more easily if formally joined.
Conflicts of interest loom large. Musk’s dual role already raises eyebrows. Bloomberg examined the bet Tesla holders are making. They see SpaceX’s success as a backstop. Some hope a merger becomes Musk’s real endgame after a tough year for Tesla stock. Bloomberg reported that Tesla shares lost ground while SpaceX completed its offering. The gap in performance has some owners eyeing a tie-up as salvation.
Others remain skeptical. A merger could dilute Tesla’s focus on cars and energy. It might expose SpaceX’s government contracts to new pressures. Valuation gaps matter too. SpaceX’s post-IPO volatility has been notable. Tesla trades on different multiples. Reconciling them would test even Musk’s deal-making skill. And then there are the regulators. A combined entity might face breakup talk before it ever forms.
Still, the momentum builds. Musk’s X posts and offhand remarks keep the idea alive. Recent chatter on the platform shows retail investors pricing in a 90 percent chance. One user summed it up. “It’s definitely inevitable now.” Others debate timing. This year? Next? After Optimus hits volume production?
Tesla’s pay package drama from years past still echoes. Shareholders once voted to award Musk a $56 billion compensation deal only to see courts strike it down before later approvals. That history reminds observers how personal and contentious these governance fights can become. Musk has made clear he wants ironclad control at SpaceX. Its IPO documents spelled out that only holders of super-voting shares can remove him. He stays as long as he holds enough of them.
The two companies already move in similar circles. Shared suppliers. Recruited engineers. Joint research on autonomy and materials. The Terafab alone could consume billions and produce chips critical to both AI training and flight computers. Such scale invites questions about whether separate boards and capital structures still make sense.
So the speculation continues. Musk left the door ajar. He did not slam it shut. He did not walk through it either. That ambiguity suits him. It keeps options open while he focuses on near-term execution. Tesla must deliver on Full Self-Driving. SpaceX must maintain its launch cadence and prepare for Starship’s next milestones. Both face competition that does not wait for corporate restructuring.
Yet the overlap Musk described is real. It grows with every new project. From orbital data centers to lunar compute stations, the ambitions intersect. And in a world where capital, talent and regulatory goodwill remain scarce, combining forces could create advantages neither could achieve alone. The question is no longer whether Musk sees the possibility. He said as much. The real test lies in whether he can execute it without alienating the very shareholders who have funded his vision so far.
Watch the stock prices. Monitor the next regulatory filing. Listen for more hints in future calls. The pieces are in motion. How they finally fit together may define the next chapter for both companies. And for the man who leads them.
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