SpaceX and Tesla have made progress in merger talks and could announce a deal as soon as December, Bloomberg News reported, citing people familiar with the matter.
The companies’ boards and advisers are discussing merger terms, equity arrangements and governance of the combined company, according to the report. A backup timeline would push an announcement to early 2027.
A merger would create the largest M&A deal on record. The two companies have a combined market value of about $3.4 trillion, and the merged entity would rank around fifth among U.S. listed companies, ahead of Amazon, according to the report.
The combined company would bring together rockets, satellite internet, AI, chips, computing, electric vehicles, robots and energy storage under Elon Musk.
Musk said in October that SpaceX and Tesla had set up independent special committees to discuss a potential merger. He supported the idea, citing room for cooperation on superintelligence software, but said he could not take part in the committee talks because of conflicts of interest.
A deal would require support from 50% of Tesla shareholders, and the companies would need to agree on an exchange ratio and the governance structure of the combined entity, Musk has said.
The two companies already work together on the Terafab chip plant in Texas, announced in August, which is intended to produce edge inference chips for Tesla’s autonomous vehicles, Cybercab and Optimus robots, as well as high-power chips for SpaceX space data centers. First test chips are targeted for May or June 2027, with mass production in the third quarter of 2028.
SpaceX has also announced a $74 billion investment in two new supercomputing campuses in Texas and Arizona. AI accounted for more than half of SpaceX’s third-quarter revenue, the company has said.
SpaceX acquired xAI in February after xAI had already bought social media platform X. The combined SpaceX-xAI entity was valued at $1.25 trillion at the time. SpaceX completed an IPO in June.
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