Tesla–SpaceX megamerger: What it could mean for businesses, shareholders

DUBAI: Tesla and SpaceX are considering a merger that could unite their businesses in electric vehicles, robotics, satellite internet, rockets, and artificial intelligence. Elon Musk, who leads both companies, said independent directors formed committees to examine the merger at the shareholders' request. However, Musk noted these committees have not yet reached an agreement on terms.

The potential merger's financial implications would hinge on the companies' valuations, shareholders' rights, and voting power. While Tesla shareholders could gain exposure to SpaceX's satellite internet, launch operations, and expanding AI computing, SpaceX investors could benefit from Tesla's electric vehicles and robotics. Yet, the potential benefits of a closer integration remain to be seen, as Musk highlighted areas where the companies might see advantages without confirming any specific financial gains or deal terms.

A key question for shareholders is how much a merger would enhance collaboration between the two separate entities. Musk stated a deal would require approval from a majority of Tesla shares, not merely the majority of votes. This distinction underscores the importance of shareholder participation in any proposed merger. SpaceX's latest financial results reveal the scale of its AI business, which now generates $7.6 billion in revenue, surpassing Starlink as SpaceX's largest business.

SpaceX also reported a significant investment in capital expenditure, totaling $48 billion during the first nine months of the year, with a large portion dedicated to AI development.