Elon Musk has expressed support for combining Tesla and SpaceX, potentially bringing his electric car, rocket, satellite internet, and artificial intelligence businesses under one roof.
After the announcement, SpaceX shares surged more than 8%.
Musk said the two companies have set up board committees to consider a merger.
The proposed tie-up could create a company valued at around $3.5 trillion.
Musk said on Tuesday that joining the two companies could speed up work on advanced chips, AI systems, humanoid robots and space-based data centers.
Tesla focuses on electric vehicles, batteries and self-driving technology, while SpaceX manufactures rockets and runs Starlink, its satellite internet service. A merger would give investors in both companies a stake in a much wider range of businesses.
A merger could deliver major financial and strategic gains for Musk. Bloomberg estimates it could add $110 billion to his wealth, while Barclays analysts project he could secure 56% of the combined entity’s voting power, giving him greater control over Tesla.
The companies have already joined forces on Terafab, a project designed to manufacture advanced chips for AI and robotics. Musk has set a target of starting large-scale production by late 2028.
However, combining the companies could bring significant challenges. SpaceX works with US government agencies, including NASA and the military, while Tesla relies heavily on its Chinese manufacturing operations. These links could trigger national security and regulatory concerns.
Investors would also need to assess whether a merger could deliver greater returns than allowing the two companies to operate independently.