Why Elon Musk wants to merge Tesla and SpaceX before Trump leaves office

Elon Musk, the world's wealthiest individual, has revealed that Tesla and SpaceX are considering a merger, potentially creating the largest business merger in history. The combined worth of the two companies is reported to be around $3.5 trillion (€3.1tn). This proposed merger aligns with the objective of finalizing it before the end of Donald Trump's presidency in January 2029, as per Bloomberg, citing sources familiar with the situation.

Musk suggests that AI will dictate the future direction of both ventures. Presently, they are jointly developing Terafab, an AI chip factory located in Texas, while Tesla's autonomous vehicles and Optimus humanoid robots may benefit from SpaceX's computational resources, including future data centers in orbit.

SpaceX's first quarterly profit since its listing in March 2025 was $4.4 billion (€3.9bn) due to a 161% revenue surge. However, the company spent $19.6 billion (€17.4bn) on AI that quarter. On the other hand, Tesla reported a 43% drop in net profit to $787 million (€700mn) with flat revenue of $28 billion (€24.9bn) due to a stagnant delivery count. A combined entity could potentially offset Tesla's financial challenges with SpaceX's expanding revenue.

With Musk owning approximately 48% of SpaceX and controlling over 80% of its votes via special shares, he aims to consolidate all operations under a single umbrella. He currently holds roughly 20% of Tesla's shares. This merger could enhance his control over these endeavors and potentially boost his wealth, given his Tesla compensation is based on achieving specific objectives linked to mergers.

Musk has expressed reservations about transforming Tesla into an AI and robotics leader without at least 25% of the votes. Despite this, he remains optimistic about the prospect of a merger, cautioning that it is not guaranteed. The companies are set to convene shareholders meetings in December to discuss the matter further.