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

On Tuesday, Elon Musk indicated that merging his companies, SpaceX and Tesla, would be a favorable idea, and announced the formation of special committees to explore a potential union. His announcement caused a 8% increase in the company's shares during extended trading. Earlier, SpaceX had announced its first profit as a public company.

Musk expects the company to generate annual recurring revenue ranging from $500 billion to $1 trillion by the end of 2027, driven by the ongoing surge in demand for its data-center space due to the AI boom. In the past, Musk has hinted at the possibility of combining SpaceX and Tesla, citing the growing overlap between the two industries.

Recently, speculation about the space company acquiring the electric vehicle maker has gained ground, with Barclays suggesting last week that a deal might be announced before Tesla's annual meeting in December. Musk mentioned in the first official confirmation that the companies were formally discussing the merger, stating, "It would be a good idea, but it's really up to the special committees of both companies."

However, Musk noted that being a conflicted party, he cannot participate in the discussions of the special committees, which comprise.