Elon Musk openly endorsed the prospect of combining SpaceX with Tesla Inc in what would be the biggest-ever corporate merger, uniting assets from electric cars to AI data centres to rocket and satellite capabilities. The world’s richest man said Tuesday the boards of both companies had formed special committees of independent directors to consider the idea.“There’s a lot of merit to combining the companies,” Musk said on a conference call after SpaceX announced earnings that beat estimates.SpaceX is valued at more than $2 trillion, while Tesla has a market value of about $1.5 trillion. When asked on the call about the prospects of merging the two companies, Musk initially said he was “tap dancing through a minefield” before going into more detail. He cautioned that getting enough support from Tesla shareholders may be tricky and that neither committee has settled on terms.
Musk Endorses Idea Which Would Result InThe World’s Biggest-Ever Corporate Union
“I think it would be a good idea, but it’s really up to the special committees of both companies,” Musk said, adding he can’t be part of the discussions because he’s a conflicted party.SpaceX and Tesla shares both extended gains in late trading after Musk’s comments. SpaceX stock jumped 10% shortly after the open Wednesday, while Tesla rose as much as 3.5%.A merger of SpaceX and Tesla would be a blockbuster, creating a conglomerate spanning electric vehicles, energy storage batteries, rockets and satellites. The stated rationale for bringing those disparate interests together lies in their shared ambitions to leverage artificial intelligence for data centres in space, driverless cars and humanoid robots.“There’s no question that Musk wants the merger, and he wants to get it done sooner rather than later,” said Gene Munster, founder of Deepwater Asset Management, which has invested in both companies. “It was a key question on the call, and Elon said it was a good idea about three times. He’s getting people excited about it, and he wants to bump up the enthusiasm.”Musk made the comments after SpaceX posted $4.4 billion in net income for the quarter ended in September, far better than analysts’ average projection of $1.88 billion. Revenue increased 161% from a year ago and also beat expectations.Revenue from SpaceX’s AI business soared to $7.56 billion in the quarter, more than nine times what the company generated a year ago.