Tesla and SpaceX explore a possible merger with Elon Musk’s backing

Tesla and SpaceX have formed independent special committees to examine a possible merger. Elon Musk said he supports the idea during SpaceX’s second public earnings report, but stressed that no agreement has been reached.

Musk said he would not participate in the committees’ discussions because he is a conflicted party. He said the transaction would require approval from 50% of all Tesla shareholders.

He also cautioned that a merger was not guaranteed, although he said combining the companies had merit.

SpaceX beats revenue expectations

SpaceX reported $14.58 billion in quarterly revenue, compared with analysts’ forecast of $12.72 billion. Revenue rose 161% year over year, while net income reached $4.4 billion and earnings per share were 35 cents.

The company’s shares rose 2% in after-hours trading after the results. Musk presented the report alongside SpaceX President Gwynne Shotwell and CFO Bret Johnsen at a Starlink factory in Texas.

AI revenue surpasses Connectivity

SpaceX said its artificial-intelligence segment, which it calls Super Intelligence, generated $7.6 billion in revenue and surpassed Connectivity, the unit providing internet services.

Musk also discussed future rocket developments. SpaceX has faced separate scrutiny over Ukrainian President Volodymyr Zelenskyy’s accusation that access to the military-grade Starshield service was restricted. Musk denied responsibility, saying Starshield was controlled by the US government rather than SpaceX; the White House also denied hobbling the service.

On the day of the earnings report, The Wall Street Journal reported, citing unnamed US officials and other people familiar with the matter, that Musk personally ordered Starshield to be throttled. Investors did not ask about the report during SpaceX’s question-and-answer session.

Tesla is due to report its own quarterly results this week, with Musk scheduled to present them on Wednesday.