Musk says he backs SpaceX-Tesla merger as rocket firm turns profit

Elon Musk expressed his support for a merger between SpaceX and Tesla on Tuesday, as the rocket and AI company reported its first quarterly profit since going public. The earnings, driven by deals to rent out computing power to AI firms, showed net income of US$4.4 billion for the July-September period, up from a loss of US$1.1 billion a year earlier.

Revenue increased 161 percent to US$14.6 billion, following a rocky start on Wall Street. Musk acknowledged the potential benefits of a merger, including collaboration on AI software, chip design, robotics, and space-based computing. However, he noted that the idea is being examined by special committees of independent directors at both companies, which he cannot participate in due to a conflict of interest.

A deal would require a majority of all Tesla shares, a challenging hurdle to clear. SpaceX's AI division, known as Super Intelligence, posted an operating profit of US$431 million, up from a loss of US$1.7 billion a year earlier. The unit's revenue more than tripled to US$7.6 billion, surpassing Starlink as the company's top source of sales.

Musk remains optimistic about SpaceX's computing capacity growth, projecting the addition of 10 gigawatts by 2027, but acknowledged power, cooling, and electrical equipment as potential limiting factors in expansion.