Elon Musk is looking forward to a major change in his business empire. The rumored possibility of a SpaceX and Tesla merger seems to be entering a new stage. On October 20, Musk backed the idea, saying there were strong reasons to join these two businesses. However, the billionaire businessman also mentioned that he won’t interfere with the decision; it will be completely up to the special shareholder committees from each company.
The July IPO of SpaceX was massively successful, and when Musk was asked about the deal following the IPO, he avoided a clear answer and mentioned, “obviously… we can’t talk about combining companies and that kind of thing on an earnings call. It’s got to be done with the appropriate process.”
In recent times, SpaceX has grown rapidly. Its shares rose nearly 5% in late trading. Even after the second quarter earnings of the company went public, the company has mentioned that it brought in USD 14.6 billion, up 161% year-over-year, which is mostly driven by its ‘Super Intelligence.’
Musk believes the companies could gain from working together on AI, chips, robots, and manufacturing. However, joining two large businesses would bring its own challenges. Investors would need to understand how the deal would work and whether it could create lasting value.
Also Read: Musk Fuels Tesla-SpaceX Merger Talk During Second-Quarter Earnings Call
Government and Defense Work Could Make the Deal Harder
SpaceX has major contracts with the US government. It also supports defense work through its satellite services. This could make a merger with Tesla more complex. The combined company needs to have clear rules to protect sensitive government projects. The company executives must pay attention to ensure that data, technology, and key decisions are handled carefully.
The merger could bring Musk's work in cars, AI, energy, and space closer together. However, the deal is still under review. Its success will depend on the value it creates and how well the company handles the legal and business risks.