Reported by 2 sources

The short version

  • Elon Musk stated there is merit to merging Tesla and SpaceX, though he cautioned that no agreement on transaction terms has been reached yet.
  • SpaceX reported a massive surge in revenue driven by its artificial intelligence and satellite internet divisions, beating analyst expectations significantly.
  • Tesla posted better-than-expected third-quarter results despite declining automotive sales, as the company continues to pivot toward robotics and autonomous driving technologies.

Elon Musk has publicly endorsed a potential merger between Tesla and SpaceX, signaling a major shift in corporate strategy for both entities. During an earnings call with SpaceX investors on Tuesday, the billionaire CEO indicated that special committees composed of independent directors at both companies are currently exploring the idea. He emphasized that while he sees significant value in combining the businesses, the process is far from guaranteed. Musk noted that because he holds leadership roles in both organizations, he is considered a conflicted party and cannot participate directly in the discussions led by these committees.

The proposed transaction faces substantial procedural hurdles. Musk clarified that any merger would require the approval of at least 50% of all Tesla shareholders, a high bar for such a transformative deal. He pushed back against market speculation that the combination is inevitable, stating that assuming certainty would be an overstatement. The formation of these special committees was requested by shareholders, reflecting growing interest in consolidating Musk’s vast technological empire under a single corporate structure.

News Journal

SpaceX delivered robust financial results alongside the merger announcement, marking its second-ever public earnings report. The aerospace and artificial intelligence company reported revenue of $14.58 billion for the quarter, significantly exceeding Wall Street projections of $12.72 billion. This figure represents a 161% year-over-year growth surge, driven primarily by its Starlink satellite internet service and its emerging AI division, which Musk refers to as Super Intelligence. The company also reported earnings per share of 35 cents and a net income of $4.4 billion.

The financial performance highlights a shifting dynamic within SpaceX’s business model. Its artificial intelligence segment generated $7.6 billion in revenue, now outperforming the connectivity business that provides internet services. This growth has bolstered investor confidence, with SpaceX shares rising 2% in after-hours trading following the report, despite starting the day down approximately 8% for the year. Musk appeared alongside company president Gwynne Shotwell and CFO Bret Johnsen at a Texas factory to present these figures, emphasizing future plans for rocket development and AI expansion.

Tesla is scheduled to release its own third-quarter earnings on Wednesday, providing another data point for investors evaluating the potential merger’s impact. Early reports indicate Tesla posted revenue of $28.05 billion and earnings per share of $0.48, both figures beating analyst expectations. However, this performance masks underlying challenges in the automotive sector, where revenue dropped 3% compared to the previous year and fell short of the prior quarter’s $28.23 billion total. The company’s stock has declined more than 11% this year, though it saw a slight rebound following news of the merger discussions.

Tesla’s strategic focus is increasingly moving away from traditional vehicle sales toward robotics, autonomous driving, and artificial intelligence. The company recently unveiled the Roadster 2, an electric sports car priced above $200,000 that utilizes SpaceX technology to perform aerial maneuvers. Musk demonstrated a remote-controlled version of the vehicle at a Texas facility, showing it flip, hover, and land using jet-like thrusters. He acknowledged that such capabilities may not be legal in all jurisdictions, highlighting the experimental nature of these new ventures.

Despite ambitious projections for its Optimus robot and Robotaxi services, Tesla has faced production delays and scaling difficulties. Analysts note that while the company has achieved notable technological milestones, it has yet to meet Musk’s earlier promises regarding widespread adoption of autonomous ride-hailing or mass robot manufacturing. Market research experts observe that Tesla’s leaders continue to make bold claims about physical AI and mobility, but actual deployment remains limited compared to initial forecasts.

The merger talks occur against a backdrop of intense geopolitical scrutiny for SpaceX. Ukrainian President Volodymyr Zelenskyy recently accused the company of restricting access to military-grade Starlink services, alleging that disruptions hampered combat missions and increased vulnerability to Russian drone attacks. Musk denied responsibility, asserting that Starshield operations are controlled by the US government rather than SpaceX. The White House has also rejected claims that it intentionally throttled the service.

Domestically, Musk’s influence extends beyond corporate boardrooms into politics and philanthropy. He has contributed hundreds of millions to political spending this election cycle and agreed to co-lead a Pentagon project on future warfare. Additionally, he pledged to distribute SpaceX shares to every child in the US next year, a move framed as direct economic empowerment rather than traditional charity. This announcement comes amid broader debates about wealth accumulation among tech leaders, with other firms like Anthropic also exploring new models for public benefit and share distribution.

Sources behind this briefing

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