Tesla and SpaceX merger could create $3.5 trillion tech giant

Elon Musk is considering merging Tesla and SpaceX, a deal that could create a $3.5 trillion technology giant, with both companies forming independent committees to evaluate the proposal. No terms have been agreed, and Musk has acknowledged the outcome is uncertain. The strategic logic centers on their growing overlap in artificial intelligence, robotics, and computing infrastructure, with SpaceX reporting strong third-quarter results on October 20. However, Tesla shares rose less than 2% in extended trading, reflecting investor skepticism about potential financial risks and governance issues. A merger could give Musk roughly 57% to 58% voting control, raising governance concerns, while Tesla investors worry about inheriting SpaceX's massive capital expenditures of $35 billion to $40 billion in the fourth quarter. Regulatory scrutiny over national security and technology transfers also poses challenges.