Elon Musk Is Reportedly Exploring a SpaceX-Tesla Merger Ahead of the Largest IPO in History

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Summary

  • CNBC reports that Elon Musk has discussed merging SpaceX and Tesla with colleagues, with SpaceX set to debut on the Nasdaq under the ticker “SPCX” on June 12
  • SpaceX is targeting a valuation of up to $1.75 trillion USD in what would be the largest IPO in history, while Tesla’s current market cap sits around $1.6 trillion USD, putting a combined entity above $3 trillion USD
  • Neither company has officially confirmed merger plans, but operational ties between the two run deep, and Musk controls 85% of SpaceX’s voting power

According to CNBC sources, Elon Musk has been discussing the possibility of combining SpaceX and Tesla. This discussion comes as SpaceX prepares to go public, having filed paperwork on May 20th and aiming to start trading on the Nasdaq as “SPCX” on June 12th. The company is hoping for a valuation of up to $1.75 trillion, which would make it the biggest initial public offering ever. While neither SpaceX nor Tesla has officially confirmed this, people familiar with the situation say they’ve been preparing for a potential merger for several years.

The reasoning behind a potential merger centers around artificial intelligence. Both companies have grown beyond their initial goals and are now primarily focused on building AI infrastructure, competing for the same limited resources like computing power, energy, and skilled engineers. SpaceX combined with Elon Musk’s AI company, xAI, earlier in 2026, increasing its estimated value to $1.25 trillion before going public. Tesla revealed a $2 billion investment in xAI in January 2026, further strengthening the financial connections within Musk’s businesses. The real question isn’t whether these companies are already closely linked – they clearly are – but whether combining them officially would unlock more financial strength than they currently have.

SpaceX and Tesla are deeply connected, far more so than typical business partners. SpaceX has invested heavily in Tesla products – nearly $700 million in Megapacks for its data centers and over $130 million in Cybertrucks. There’s a lot of movement of people and money between the companies, with shared engineers, board members, and financial ties. Recently, Nvidia redirected a $500 million order of GPUs, at Elon Musk’s request, from Tesla to his AI company, xAI. Even their suppliers see them as one combined customer. Essentially, they function less like two separate companies and more like divisions within a single, loosely organized parent company.

The real difficulty lies in how to actually combine Tesla and SpaceX. A stock swap is the most probable method, but figuring out a fair exchange rate between the recently public SpaceX and the well-established Tesla is tricky, because Elon Musk has controlling interests in both companies. While legal experts suggest a merger wouldn’t likely face antitrust issues—rockets and electric cars don’t compete in the same markets—it would create significant problems regarding how shareholders are governed. Tesla shareholders aren’t guaranteed their interests would be protected in a stock swap, as Musk, holding 85% of the voting power at SpaceX, would essentially dictate the terms. SpaceX’s official documents acknowledge it’s a “controlled company,” meaning standard protections for shareholders are weakened, leaving Class A shareholders with limited options.

History suggests this isn’t good news for smaller investors. This marks the fourth time Elon Musk has arranged a significant deal between his companies. Back in 2016, SolarCity merged with Tesla, leading to a lawsuit from shareholders. More recently, in March 2025, xAI bought X (formerly Twitter) for $33 billion, essentially increasing the platform’s value from $9 billion to $33 billion using xAI’s financial resources. Despite shareholders previously voting down a similar idea, Tesla then invested another $2 billion in xAI. These deals consistently follow the same sequence: Musk acts first, and shareholders deal with the consequences later.

Wedbush analyst Dan Ives believes Tesla and X (formerly Twitter) will likely merge by 2027, as both companies struggle with similar limitations in areas like energy, processing power, artificial intelligence, and chip availability. Ross Gerber, CEO of Gerber Kawasaki, explained to CNBC that a merger would allow Elon Musk to achieve his goal of leading a single, unified company, and would give the resulting business the financial strength to challenge Google and Microsoft in the AI market. According to Walter Isaacson, author of Elon Musk’s biography, Musk frequently moves employees between his companies, suggesting a desire to ultimately combine them into one large organization.

I’m so excited! It looks like SpaceX might finally start trading on the Nasdaq with the ticker symbol “SPCX” around June 12th. As of right now, though, neither SpaceX nor Tesla has said anything official about merging, so we’ll have to wait and see what happens with that.

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2026-05-28 09:56