Elon Musk wants to merge SpaceX and Tesla: Here's what to know

Elon Musk announced this week that SpaceX and Tesla are creating committees to explore a potential merger, which would form the largest corporate deal in history, valued at approximately $3.5 trillion.

SpaceX was founded by Musk in 2002 to reduce the cost of space travel and eventually enable human colonization of Mars. Its Falcon 9 rockets and Dragon capsules are used for space launches and transporting astronauts, while the Starlink network provides global internet access. In February, SpaceX absorbed xAI, Musk's AI company, which had taken over social media platform X in 2025. SpaceX went public this year, valuing the company around $2 trillion.

Tesla, founded in 2003 and led by Musk since 2008, is the world's most recognized electric vehicle manufacturer. However, its core car business is facing challenges, and Musk now emphasizes Tesla's focus on self-driving robotaxis and Optimus, the company's humanoid robot.

Musk believes a merger would allow the combined company to control key components of AI, such as chips, energy, and connectivity. However, the deal faces significant hurdles, including the need for a majority of Tesla shares to approve the merger and potential legal challenges due to SpaceX's ties to the U.S. government and Tesla's presence in China. Despite these obstacles, most analysts expect the merger to eventually go through, with odds at around 90% by early 2027.