Elon Musk backs SpaceX-Tesla merger as rocket firm turns profit

Elon Musk has expressed support for a merger between SpaceX and Tesla, as the rocket and AI company reported its first quarterly profit since going public. Musk acknowledged that a potential combination would be "a good idea," despite describing it as "tap dancing through a minefield". Special committees of independent directors from both companies were formed to examine the idea following requests from shareholders.

However, Musk clarified that he couldn't participate in the discussions due to a conflict of interest. The AI division, now known as "Super Intelligence", played a crucial role in the turnaround, driving revenue growth and generating an operating profit of $431 million. SpaceX's cloud services agreements, wider adoption of its Grok chatbot, and the acquisition of Cursor, an AI coding startup, all contributed to the growth.

While revenue at the Starlink satellite internet unit increased by 69%, consumer revenue per subscriber fell. The company has invested heavily in computing capacity, reaching 1.7 gigawatts, with plans to expand to an additional 10 gigawatts by 2027.