Business

Tesla and SpaceX are studying a merger, and Musk says it’s a good idea

Both boards formed independent committees after Musk floated combining the companies, a deal one analyst valued near $5 trillion. No agreement exists yet.

Published

5 hours ago

October 21, 2026

Massih Shahbazi

A rocket lifting off into a starry night sky, in black and white, beside the headline One company, one man

Elon Musk runs a car company that makes robots and a rocket company that runs a satellite internet business. This week he said out loud what investors have whispered for years: maybe they should be one company.

SpaceX and Tesla have each formed special committees of independent directors to study a possible merger, Musk said on SpaceX’s third-quarter earnings call on Tuesday, Oct. 20, NBC News reported. The committees have not reached an agreement, and there is no guarantee they will, he said.

The largest deal ever, maybe

The numbers are hard to picture. One Wall Street analyst put the combined value of the two companies near $5 trillion, which would make it the largest corporate deal in history, CBS News reported. Al Jazeera put the total above $3 trillion. The gap between those estimates is itself bigger than almost any company on Earth.

Investors liked the idea. SpaceX shares rose roughly 8% to 10% after the earnings report and the merger comments, according to CNBC and CNN. CNBC reported that SpaceX’s revenue rose 161% in the quarter, which gave the stock its own reason to jump.

Musk’s pitch, and his distance

Musk said he sees a lot of merit in combining the companies, CNN reported, and called a merger “a good idea.” He was also careful to step back from the decision: the choice rests with the independent committees and with shareholders, and any proposal would need a shareholder vote, according to CNN and Al Jazeera.

That careful phrasing matters. Musk is the largest shareholder and chief executive of both companies. In a deal between two companies run by the same person, the biggest risk is that one set of shareholders gets a worse price so the other set gets a better one. Independent committees exist to protect against exactly that, at least on paper.

Follow the shares

The tension is simple to state and hard to settle. Tesla’s shareholders own a stake in a car and energy business. SpaceX’s shareholders own a stake in rockets and Starlink. A merger forces a single answer to a question that’s hard to answer even once: what is each of those businesses worth, compared with the other?

Whoever gets the better exchange ratio wins billions. Whoever gets the worse one loses them. And the person with the most influence on both sides of that negotiation is the same man. That’s why price, structure and timeline, all still undefined according to the reporting, will be the real story if this goes further.

Why he might want it

Musk’s companies already share a lot: talent, technology and his attention. Tesla’s work on batteries, manufacturing and artificial intelligence overlaps with what SpaceX needs for rockets and satellites. A single company could move people and technology between projects without the legal friction of two separate boards.

There’s also a simpler reason. A merged company would concentrate Musk’s ownership and control in one place. For a founder who has fought public battles over his pay and voting power at Tesla, one larger company with one board might be easier to steer.

There’s also the matter of what each company is promising. Tesla’s valuation has long rested on bets about self-driving cars and robots. SpaceX’s rests on launches and Starlink subscribers. Blending them means blending those bets, and investors who trusted one story may not trust the other.

From the cheap seats

For a small Tesla investor with a few shares in a retirement account, the question is whether they’d be better off owning a slice of rockets too. Some would welcome it. Others bought Tesla because they wanted a car company, not a space company, and a merger would change what they own without asking them individually.

That’s why the shareholder vote matters. It’s the one moment in this process where ordinary investors, not just committees and analysts, get a say.

The case for caution

No deal exists. The committees could recommend against it, the price could prove impossible to agree on, or regulators could object to the size and the overlapping control. One smaller outlet reported a specific shareholder-approval hurdle, but AIME 360 could not confirm that figure in the major coverage, so we’re not repeating it.

Musk also has a long history of floating ideas publicly that never happen on the timeline he suggests, or at all. Markets reward the floating anyway, as SpaceX’s stock showed this week.

One company, one man

The deeper question isn’t financial. It’s about how much of the world’s critical infrastructure, from electric cars to orbital internet to rocket launches, should sit inside a single company controlled by a single person. Two companies at least mean two boards, two sets of disclosures and two sets of shareholders asking questions.

Musk says it’s a good idea. The committees will decide whether it’s a good deal. Those are not the same thing.