SpaceX and Tesla have established special committees to evaluate a potential merger, according to Elon Musk, the CEO of both companies. Speaking on SpaceX's earnings call Tuesday, Musk described the potential combination as a good idea while clarifying that he is not participating in the discussions due to a conflict of interest.
The two firms have increased collaboration on artificial intelligence, chips, robotics, and connectivity projects. Musk stated that there is significant value to be gained from this technological cooperation. He cautioned, however, that a deal is not guaranteed. Musk noted that approval from 50% of Tesla shareholders would be required, a threshold he characterized as a high hurdle.
Market analysts are weighing in on the likelihood of the transaction. Gene Munster, a tech analyst at Deepwater Asset Management, posted on X Tuesday that he believes there is a 95% chance a deal will occur within the next two years. Munster argued that shareholders would support such a merger.
The potential combination would create a massive entity. SpaceX currently holds a market capitalization exceeding $2 trillion, while Tesla's market cap stands at nearly $1.5 trillion. Tesla is scheduled to report its quarterly results on Wednesday.