Elon Musk Is Reportedly Exploring a SpaceX-Tesla Merger Ahead of the Largest IPO in History

Summary

• CNBC reports that Elon Musk has discussed merging SpaceX and Tesla with colleagues, with SpaceX set to debut on the Nasdaq under the ticker “SPCX” on June 12
• SpaceX is targeting a valuation of up to $1.75 trillion USD in what would be the largest IPO in history, while Tesla’s current market cap sits around $1.6 trillion USD, putting a combined entity above $3 trillion USD
• Neither company has officially confirmed merger plans, but operational ties between the two run deep, and Musk controls 85% of SpaceX’s voting power

CNBC reports, citing people familiar with the matter, that Elon Musk has floated the idea of merging SpaceX and Tesla with colleagues. The timing is deliberate: SpaceX filed its S-1 on May 20 and is expected to begin trading on the Nasdaq under the ticker “SPCX” on June 12, targeting a valuation of up to $1.75 trillion USD in what would be the largest public market debut in history. No official confirmation has come from either company, but the structural groundwork for a combination has been quietly assembling for years.

The merger logic starts with AI. Both companies have evolved well beyond their original mandates and are now, at their cores, AI infrastructure businesses competing for the same resources: compute, power, and specialized engineering talent. SpaceX merged with Musk’s AI startup xAI earlier in 2026, pushing its private market valuation to $1.25 trillion USD before the IPO filing. Tesla, meanwhile, disclosed a $2 billionUSD  investment in xAI in January 2026, deepening the financial web connecting Musk’s empire. The question a merger is really answering is not whether these companies are already intertwined — they clearly are — but whether a formal combination creates more capital firepower than the current arrangement.

The operational ties are already closer than most corporate partnerships get. SpaceX has spent $697 million USD on Tesla Megapacks to power its AI data centers and another $131 million USD on Cybertrucks. Engineers, board members, and financial relationships move fluidly between the two. In 2024, Nvidia agreed to divert a $500 million USD GPU order away from Tesla to xAI at Musk’s direct request. The companies share suppliers who already treat them as a single customer. Structurally, they are less two separate entities and more two operating divisions of the same informal holding company.

The mechanics of actually combining them is where the complexity lives. A stock swap is the most likely vehicle, but determining the exchange ratio between a newly public SpaceX and a long-established Tesla creates an immediate valuation conflict of interest, given that Musk controls both. Legal experts cited in coverage of the CNBC report noted that a merger would likely survive antitrust scrutiny, since rockets and electric vehicles don’t overlap in any market, but would face significant shareholder governance challenges. Tesla shareholders have no guarantee their interests would be prioritized in a swap structure that Musk, as the controlling party at SpaceX with 85% voting power, effectively sets the terms for. SpaceX’s prospectus notes the company is a “controlled company,” which allows for exceptions to standard governance protections, meaning Class A shareholders have limited recourse.

The precedent is not encouraging for minority investors. This would be the fourth time Musk has orchestrated a major transaction between companies he controls. SolarCity was folded into Tesla in 2016 in a deal that drew a shareholder lawsuit. xAI acquired X for $33 billion USD in March 2025 in a transaction that effectively restored a platform worth $9 billion USD to a $33 billion USD valuation on the back of xAI’s balance sheet. Tesla’s $2 billion USD xAI investment followed despite shareholders having previously rejected a similar proposal. Each deal has followed the same pattern: Musk moves first, shareholders absorb the complexity afterward.

Wedbush analyst Dan Ives expects the partnership to culminate in a full merger by 2027, arguing both companies face identical constraints around power, compute, AI, and chip supply. Ross Gerber, CEO of Gerber Kawasaki, told CNBC a merger would allow Musk to fulfill a longstanding ambition of running one consolidated company while giving the combined entity the capital scale to compete in AI against Google and Microsoft. Walter Isaacson, who wrote the definitive Musk biography, put it plainly: “Elon Musk is always moving engineers back and forth between his companies. I think he wants to make this one big company.”

SpaceX is expected to begin trading on the Nasdaq under “SPCX” on June 12. Neither SpaceX nor Tesla has officially confirmed any merger discussions.