Behind Elon Musk's plans for a mega-merger of SpaceX and Tesla

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Set us as preferred One company makes electric cars that are inherently terrestrial, ferrying millions of drivers on roads around the world.The other shoots rockets into space and has aspirations to make it to Mars.

At first glance, they would seem like an odd pairing.Yet, this week Elon Musk said that aerospace firm SpaceX and EV carmaker Tesla — two trailblazing companies he built and serves over as chief executive — were considering a tie-up, confirming speculation that what would be the biggest corporate merger ever is a real possibility.And like much else on Wall Street, the driving force apparently is artificial intelligence, including demands for massive infrastructure spending to support its vast computing power.Although Tesla’s best-selling Model Y and Model 3 require drivers to get behind the wheel, the company has developed an autonomous ride-hailing vehicle called a Cybercab with no human controls that has just begun pilot testing.

Musk sees it and a robot called Optimus as keys to the future of Tesla, which will rely on vast cloud computing power that it and SpaceX already are developing together.“This is a strategic no brainer for Musk and the SpaceX ecosystem to merge with Tesla,” analyst Dan Ives, a partner Yorkville Ives & Co., said in a statement.But even if the deal makes strategic sense, there are myriad practical challenges in combining two trillion-dollar companies with vastly different operations — as well as regulatory concerns that are not just domestic, but also probably will include China and Europe.

Shareholders of both companies would have to approve the deal.Business After years of delays, Elon Musk demonstrated the new Tesla Roadster in Texas on Thursday.

Production won’t actually begin until 2028.SpaceX, which was founded in 2002 in El Segundo and moved its headquarters from Hawthorne to Texas in 2024, is a rocketry pioneer that has become the world’s d...