Musk Backs Tesla-SpaceX Merger, Eyeing $3.5 Trillion AI and Space Giant

Elon Musk on Tuesday publicly endorsed a merger of Tesla (TSLA) and SpaceX (SPCX), arguing the two companies hold combined value in AI, chip design, robotics and space infrastructure. A combined entity would be valued at roughly $3.5 trillion but faces national security review, governance scrutiny and concentrated execution risk. Musk cited cooperation in superintelligence software, chip design, the Terafab semiconductor project, Optimus humanoid robots, heavy-lift launch and the Starmind satellite constellation. Starlink could supply connectivity for Tesla's robotaxi and autonomous driving systems, while Tesla's battery and energy storage products could meet SpaceX's growing power needs. Musk has said he wants Terafab to begin mass production by the end of 2028. The main obstacles are geopolitical and regulatory. SpaceX is a key contractor for the U.S. military, intelligence agencies and NASA, while Tesla's Shanghai plant is central to its production and sales. Shareholder approval and governance questions, including conflicts of interest and Musk's voting control, would also arise.