Musk says SpaceX-Tesla merger is 'a good idea' as companies form deal committees

Elon Musk expressed on Tuesday his belief that a merger between SpaceX and Tesla would be a wise decision. The companies subsequently established special committees to deliberate on the potential union, which resulted in an 8% increase in the value of SpaceX and Tesla shares during extended trading hours. Earlier, Tesla had reported its first profit as a publicly traded company, and Musk forecasted annual recurring revenue to range between $500 billion and $1 trillion by the conclusion of 2027, driven by increased demand for its data-center space due to the rapid growth of the artificial intelligence sector.

Musk has previously hinted at the possibility of merging SpaceX and Tesla, pointing out the increasing convergence between the two companies. Rumors about the space enterprise purchasing the electric vehicle manufacturer have gained momentum in recent times, with Barclays suggesting last week that a deal might be announced before Tesla's annual meeting in December.

In the first official statement confirming the existence of ongoing discussions, Musk stated that a merger would be a good idea, but the ultimate decision rests with the respective special committees of both companies. Musk clarified that due to his dual role in both entities, he cannot participate in the deliberations of the special committees.