SpaceX-Tesla merger idea gets Musk backing

Elon Musk said Tuesday he would support a merger of SpaceX and Tesla, while warning that a deal is not certain and would face a high voting hurdle.

Asked about a possible tie-up on a call with analysts, Musk said he felt he was “tap dancing through a minefield,” but called a combination “a good idea.” He said special committees of independent directors at both companies had been set up at shareholders’ request to study the idea.

Musk said he could not take part in the committee talks because he has a conflict of interest. He also said the committees had not agreed on any terms and that treating a merger as certain would overstate the situation.

Any deal would need backing from a majority of all Tesla shares, not just those cast in a vote, Musk said. He said SpaceX and Tesla could benefit from working together on AI software, chip design, robotics and space-based computing.

SpaceX shares rose nearly 5 percent in after-hours trading after the comments.

The remarks came as SpaceX reported net income of $4.4 billion for the July-September quarter, compared with a $1.1 billion loss a year earlier. Revenue rose 161 percent to $14.6 billion.

SpaceX said its AI unit, now called Super Intelligence, drove the turnaround. The unit’s revenue rose more than ninefold from a year earlier to $7.6 billion, overtaking Starlink satellite internet as the company’s largest source of sales. It reported an operating profit of $431 million, compared with a $1.7 billion operating loss a year earlier.

SpaceX said new cloud services agreements, wider use of its Grok chatbot and its acquisition of AI coding startup Cursor helped the AI business. Its cloud customers include Anthropic and Google.

The company invested $19.6 billion in the quarter, including $16.4 billion in AI, bringing capital spending for the first nine months of the year to $48 billion. Musk said he was “fairly confident” SpaceX could bring an additional 10 gigawatts of computing capacity online in 2027, but said power, cooling and electrical equipment were limiting factors.

Starlink revenue grew 69 percent to $5.2 billion, and consumer subscribers reached 13.6 million. Average monthly revenue per consumer fell to $69 from $83 a year earlier.

SpaceX also completed the first revenue-generating flight of Starship, carrying 26 next-generation Starlink satellites into orbit.