Elon Musk, CEO of both SpaceX and Tesla, said on Tuesday, Oct. 20, 2026, that the boards of both companies have formed special committees of independent directors to evaluate a potential merger. Musk stated during a SpaceX third-quarter earnings call that while he supports the idea, the committees have not agreed on transaction terms, and a deal is not certain.
The announcement follows increasing operational overlap between the two firms, including a chip-manufacturing joint venture known as Terafab. Earlier in 2026, Tesla announced it was investing approximately $2 billion to acquire shares in an artificial intelligence subsidiary of SpaceX. Barclays analysts suggested last week that a deal could be announced before Tesla’s annual meeting in December 2026.
SpaceX reported its first quarterly profit as a public company on Tuesday, with revenue increasing 161% to $14.58 billion. The growth was driven by a surge in AI-related revenue to $7.56 billion, which includes renting data-center capacity to companies such as Anthropic and Google. Net income reached $4.4 billion, exceeding analyst expectations of $1.57 billion.
A merger would affect two groups of shareholders: those in the publicly traded Tesla and those in SpaceX, which recently became a public company. Musk currently owns nearly 20% of Tesla and just under 50% of SpaceX, but holds more than 50% of the voting power at SpaceX. For a merger to proceed, Musk noted that it would require support from both sets of shareholders, and specifically a vote of support from 50% of all Tesla shareholders, not just those who cast ballots.
Musk noted that the companies would cooperate on superintelligence software, robotics, and the Starmind orbital AI-computing constellation. A person familiar with the matter told Reuters that the current discussions could result in SpaceX acquiring Tesla, with Tesla already employing an investment bank for advisory services.
The companies continue to develop the Terafab chip facility, which is expected to produce its first test chip in May or June 2027, with volume production targeted for the third quarter of 2028. Additionally, the Starlink satellite unit reached 13.6 million subscribers this quarter, though average monthly revenue per user fell to $69 from $99 in 2023. No definitive deadline for the merger committees' findings has been reported.