Musk says SpaceX and Tesla exploring possible merger

Elon Musk has admitted that SpaceX and Tesla are in talks on a potential merger that would make them one of the biggest companies ever. It would be worth a combined $3.5 trillion.

The billionaire added on Tuesday that the two firms have formed special committees to discuss the proposal, but are yet to reach any deal terms, Reuters reported.

“I do think there’s a lot of value in bringing the companies together,” Musk said during a SpaceX earnings call, noting potential areas for collaboration in artificial intelligence, chip design, robotics and connectivity.

But he warned against assuming the deal will happen, saying there was a requirement of shareholder backing for the merger.

“Some folks out there think that a SpaceX and Tesla merger is a given, and I think that would be an overstatement,” Musk said.

The combination would unify Tesla’s electric cars, energy storage and robotics operations with SpaceX’s rocket launches, satellite internet and growing artificial intelligence enterprise.

The deal looms as the lines between Musk’s businesses continue to blur as they collaborate on AI and other next-generation manufacturing.

SpaceX gained more than 8% after hours following the announcement, while Tesla stock rose by 1.8%, the report says.

The acquisition proposal is still in a discussion phase, and the special committees of both companies haven’t yet concluded a transaction.