Elon Musk has declared his support for merging SpaceX with Tesla, revealing that both companies have formed special committees to explore the idea. Speaking on SpaceX's earnings call on Tuesday, Musk said the committees consist of independent directors and were created at shareholders' request. He cautioned that any deal would require approval from 50% of Tesla shareholders and warned against assuming the merger is certain. 'I do think there's a lot of merit to combining the companies,' Musk said, while acknowledging the hurdles involved. Musk recused himself from the committee discussions because of his conflict of interest as the majority shareholder in both firms.
SpaceX's financial results, released alongside the merger announcement, exceeded Wall Street expectations. The aerospace and artificial intelligence company reported revenue of $14.58bn, compared with analyst projections of $12.72bn, representing 161% year-over-year growth. The company posted net income of $4.4bn and earnings per share of 35 cents. SpaceX's artificial intelligence segment, which the company calls Super Intelligence, generated $7.6bn in revenue and now outperforms its Connectivity business, which provides Starlink internet services. The strong results sent SpaceX's stock up 2% in after-hours trading.
Musk appeared at SpaceX's Starlink factory in Texas to present the earnings report alongside company president Gwynne Shotwell and chief financial officer Bret Johnsen. The company highlighted plans for future rocket developments and continued expansion of its satellite and artificial intelligence operations. Tesla is scheduled to release its own quarterly earnings this week, with Musk set to deliver the report on Wednesday. Earlier this week, Tesla unveiled its new Roadster 2 electric sports car, which Musk demonstrated performing aerial stunts using pressurized air tanks.
The merger exploration comes as SpaceX faces international scrutiny over its Starlink military service. Ukraine's president Volodymyr Zelenskyy accused SpaceX of restricting access to military-grade Starlink internet, alleging the disruption led to failed combat missions and increased vulnerability to Russian drone attacks. Musk denied responsibility, stating that Starshield is controlled by the US government, not SpaceX. The White House also denied involvement. Moments before the earnings call, the Wall Street Journal reported that Musk personally ordered the throttling of Starshield, citing unnamed US officials, though Musk faced no questions about these reports during the investor Q&A.
The potential merger represents a significant consolidation within Musk's business empire. Tesla is the second-most valuable part of his holdings, and combining it with SpaceX would create a conglomerate spanning electric vehicles, aerospace, artificial intelligence and satellite communications. No agreement on transaction terms has been reached, and both companies' special committees remain in the exploration phase. Shareholders at both firms would ultimately determine whether any proposed merger proceeds to completion.