Elon Musk sends startling message on SpaceX, Tesla merger
Two of the most valuable companies on the planet share one chief executive, overlapping workforces, and billions of dollars in cross-company transactions. Wall Street cannot stop asking whether Elon Musk will fold SpaceX and Tesla into a single entity.
That speculation surged after reports confirmed Musk had discussed combining the two companies with close colleagues in recent weeks.
SpaceX is preparing to kick off its Wall Street roadshow within days ahead of what could be the largest IPO in market history.
A combined SpaceX and Tesla would create a conglomerate spanning rockets, satellites, electric vehicles, AI infrastructure, and energy storage valued at roughly $3.35 trillion to $3.6 trillion based on SpaceX's IPO target range and Tesla's current market capitalization.
The deal is far from certain, but the threads connecting these companies have grown too thick for investors to dismiss.
Musk has discussed folding SpaceX and Tesla together
Musk raised the idea of merging SpaceX and Tesla in conversations with colleagues, and Tesla employees say the prospect has been openly discussed internally, CNBC reported.
SpaceX is expected to begin trading on the Nasdaq in roughly two weeks following its S-1 filing.
SpaceX carries a private valuation of roughly $1.25 trillion following its February merger with Musk's AI venture, xAI, a deal that also folded the social media platform X under the same corporate roof, though its May 20 S-1 filing now targets an IPO valuation of $1.75 trillion to $2 trillion.
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Tesla's market capitalization sits at approximately $1.6 trillion, making it one of the most valuable companies in the world.
Legal experts cited in the report indicated that a combination would face limited antitrust risk but significant shareholder complexity around structure.
Musk holds 85% voting control at SpaceX, meaning board resistance to any deal would be negligible, the company's prospectus disclosed.
The harder questions involve determining the parent company, structuring a stock swap, and protecting minority shareholders on both sides of the transaction.
Those unresolved details keep this from being a done deal, despite the clear strategic logic driving the conversation forward.
SpaceX and Tesla share billions in cross-company spending
The financial ties between the two companies have deepened over the past two years, creating transactions that would simplify under a single corporate structure.
SpaceX purchased $697 million worth of Tesla Megapack energy storage systems in 2024 and 2025 to power xAI data centers, according to the SpaceX prospectus.
SpaceX also spent $131 million on Tesla Cybertrucks in 2025, and Tesla invested $2 billion in xAI in January 2026 before those shares converted into SpaceX holdings following the February merger, the prospectus showed.
A shared vice president of materials engineering serves both companies simultaneously, reflecting deep structural overlap.
Both companies are directing enormous capital toward AI infrastructure at a pace that outstrips most public market competitors in the technology sector.
SpaceX allocated more than 75% of its $10.1 billion in first-quarter capital expenditure toward AI, CNBC reported, while Tesla flagged total capex exceeding $25 billion this year.
In March 2026, Tesla, SpaceX, and xAI announced Terafab, a joint chip manufacturing facility originally pegged at $25 billion.
SpaceX disclosed in a May 6, 2026, Grimes County hearing notice that the first phase alone will cost $55 billion, with full buildout potentially reaching $119 billion.
That facility represents the clearest physical evidence that these companies are converging toward one structure.
Wedbush's Dan Ives sees 80% to 90% chance of a merger by 2027
Dan Ives, managing director at Wedbush Securities, places the probability of a merger at 80% to 90% with a target completion in the first half of 2027.
He has called Tesla and Nvidia 'the best physical AI plays' and frames a combined SpaceX-Tesla entity as an extension of that thesis.
"I think that's the step process that they'll go through, and then ultimately a merger with Tesla," Ives told the Schwab Network in April, while maintaining his $600 price target for Tesla.
He argued that autonomous robotics alone could add between $1 trillion and $2 trillion to the market capitalization.
My contrarian belief is I don't think SpaceX will IPO… I think that it will reverse merge into Tesla, and I think Elon will use it as a moment to consolidate control and power of his two seminal assets into one cap table
Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, has described the combined entity as a potential 'Berkshire Hathaway of AI' offering investors a clear AI bet, though he has also raised conflict-of-interest concerns and argued the deal would resemble an acquisition more than a merger.
"It looks more like SpaceX will be bailing out Tesla by buying them over, calling it a merger," Gerber wrote on the social platform X in April, arguing the deal would function more like an acquisition.
That split captures the uncertainty around the potential combination of Musk's two flagship companies.
Prediction markets and Musk's pay structure frame the stakes for investors
While Ives places merger odds above 80%, prediction markets tell a far more cautious story about the timeline for any deal to come together.
Kalshi traders placed only 33% odds on a merger before May 2027, with probabilities swinging sharply in recent sessions, CNBC reported.
Polymarket participants assigned a probability between 17% and 26% that a formal merger announcement would be made before the end of 2026, according to TradingKey.
That gap between analyst confidence and market pricing reflects genuine uncertainty about whether Musk will follow through on a combination.
Musk's compensation adds another dimension to the speculation, because his SpaceX pay is tied to the company reaching a $7.5 trillion market cap alongside a Mars colonization milestone, CNBC reported.
A merger that would boost the combined entity's valuation would accelerate his progress toward that target and other milestones in Tesla's board-approved pay plan.
Analysts cited above, including Ives and Gerber, point to the structure of any stock swap and the potential for dilution of retail ownership stakes as the central unresolved concerns for Tesla shareholders.
Institutions managing large pension and mutual funds have publicly stated that they would use their voting power against any merger plan that harms retail shareholders, according to TradingKey.
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This story was originally published May 28, 2026 at 9:03 AM.