Elon Musk discussed the possibility of merging SpaceX and Tesla with colleagues on May 26, according to foreign media reports. Tesla's stock rose approximately 2% at the close of trading on May 26 and gained further in after-hours trading. The merger discussion comes as SpaceX prepares for its initial public offering, renewing market focus on a potential combination of Musk's two flagship companies.
Merger speculation between Tesla and SpaceX has surfaced periodically in recent years. According to reports, many Tesla employees have long anticipated a potential merger, with internal discussions occurring at the company. Sources indicate that the two companies have engaged in regular collaboration due to shared challenges in power supply and computing capacity.
Personnel and Ownership Interconnections
Musk and his brother Kimbal Musk, along with venture capitalist Aria Ehrenprice, serve simultaneously on the boards of both companies. SpaceX board members Antonio Gracias and Steve Jurvetson previously worked at Tesla. Charles Kooman holds the position of vice president of materials engineering at both Tesla and SpaceX.
In January 2025, Tesla announced a $2 billion investment in xAI, Musk's artificial intelligence company. xAI subsequently merged with SpaceX and was renamed SpaceXAI, converting Tesla's shareholding into equity in SpaceX.
Business Transactions and Collaboration
SpaceX purchased $697 million worth of Tesla Megapack battery storage systems during 2024 and 2025 to power its Colossus supercomputer cluster located in Memphis, Tennessee. In 2025, SpaceX also spent $131 million purchasing Tesla Cybertruck pickups.
Prior collaborations include Tesla selling solar equipment and automotive components to SpaceX, while SpaceX developed specialized alloy materials for Tesla's Cybertruck.
Artificial Intelligence Focus
Artificial intelligence represents a shared strategic focus for both companies. SpaceX's first-quarter capital expenditure of $10.1 billion included more than 75% allocated to AI-related projects. Tesla's latest financial report indicated that 2025 capital expenditure would increase by nearly three times, exceeding $25 billion, to support new factory construction and AI infrastructure development.
Analyst Prediction and IPO Timeline
Dan Ives, a prominent Tesla bull at Wedbush Securities, predicted following SpaceX's S-1 filing that SpaceX and Tesla would merge in 2027. Ives noted that Tesla already holds SpaceX equity, and the jointly operated Terafab factory deepens the business integration between the two companies.
On May 20, SpaceX filed its registration statement with the U.S. Securities and Exchange Commission. SpaceX will list on Nasdaq under the ticker symbol SPCX. The roadshow is scheduled for June 4, pricing for June 11, and listing for June 12.
A SpaceX IPO would position Musk to lead two of the ten highest market-value companies in the United States. Tesla's current market capitalization exceeds $1.6 trillion, while SpaceX carries a market valuation between $1.75 trillion and $2 trillion.
