Two of the most valuable companies in the world are exploring a potential merger. Tesla CEO and founder of SpaceX, , on Tuesday said that they had formed special committees to discuss the merger between the two entities. While the size of the deal has not been officially announced, SpaceX is about $2 trillion, and Tesla is worth nearly $1.5 trillion, making the combined entity worth at least $3.5 trillion. SpaceX is currently the 7th most valuable company in the world, while Tesla sits in the 11th spot.
“I think would be a good , but it’s really up to the special committees of both companies,” Musk was quoted as saying by Reuters. Sharing further details about the potential merger, Musk said the special committees would discuss the matter while he sits out.
Musk not to be part of discussions
“Because I’m a conflicted party, I can’t actually be in the discussions of the special committees,” which comprised independent directors, he told investors on a conference call, according to Reuters.
“The companies had formed the special committees at the request of shareholders, who ultimately would need to approve a deal,” the world’s richest man added.
As the CEO of both companies, Musk owns around a 20% stake in Tesla and 45% of SpaceX. Musk controls about 82% of SpaceX’s voting power and would own about a third of the combined entity if the merger goes through.
What Tesla brings to the table
Tesla was founded in 2003 by Martin Eberhard and Tarpenning and Musk joined the EV-maker as the lead investor in 2004. He was officially recognized as co-founder in 2009 as part of a legal settlement. Tesla’s vehicle portfolio included passenger electric cars, autonomous vehicles, semi-trucks and Robo-taxis. Tesla recently unveiled its latest offering, the , a high-performance sports car that can ‘fly’.
What SpaceX offers
SpaceX was founded in 2002 by Musk and currently operates under three segments: space missions, satellite internet services through Starlink, and AI under xAI.
Why merge Tesla and SpaceX?
Musk pointed out the benefits of combining the two entities.
“I do think there’s a lot of merit to combining the companies as we are pretty much in the superintelligence singularity, and there’s a lot to be gained from cooperating on developing superintelligence software, chip design, the Terafab obviously, robotics, mass-to-orbit with the Starmind constellation, connectivity,” he said.
, the chip manufacturing joint venture between the two companies, should produce its first test chip around May or June of next year and aims to reach volume production by the third quarter of 2028, Musk said.
He, however, made it clear that it would be premature to assume a SpaceX-Tesla merger would happen, noting that the special committees had not agreed on transaction terms and may never do so.
(With inputs from agencies)