Merger. Merger. M–M–M–Merger. America. Let’s go. Let’s do this.
A long-rumored tie-up between SpaceX and Tesla is closer to becoming a reality.
The financial media was awash midweek with mega-cap merger headlines following SpaceX’s earnings call during which Elon Musk repeatedly expressed support for combining the companies, calling it “a good idea.”
Musk can’t consecrate the marriage on his own. He “only” controls 20% of the voting power at Tesla, and on the SpaceX call, Musk said he isn’t participating in talks between committees established to weigh the merits of a tie-up because he’s “a conflicted party.”
(To quote again from Semi-Pro which, despite an undeservedly horrible Rotten Tomatoes score, counts among the funnier movies of Will Ferrell’s career, “Look what we’re dealing with here: This guy plays power forward for his own team.”)
In an “explainer” (there’s really nothing to “explain”: Musk wants to consolidate his empire and what Elon wants he generally gets), Bloomberg wrote Wednesday that “at first glance, it might seem like SpaceX and Tesla still don’t have much overlap other than being owned by Musk.” The “still” refers to a comment Musk made years ago about the two companies having little to do with one another.
The “common denominator,” the linked piece went on, is Artificial Intelligence. (Bloomberg didn’t get the executive memo: It’s “Super Intelligence” now. Get it right or get deported. It’s up to you.)
That — the SI “common denominator” narrative — is certainly Musk’s excuse, but here’s the thing: Neither Tesla nor SpaceX are actually SI companies. Not foundationally, and not even according to their names. Tesla makes… well, Teslas, which are cars, autonomous, flying or otherwise. SpaceX makes things that go to space.
And while data centers can be put into space just like “that little red Tesla” that so fascinated Wilbur Ross, the fact that a space company can put GPUs on the moon doesn’t necessarily make it an AI company, just like the fact that Teslas can be sent off to orbit the sun doesn’t make Tesla a space enterprise.
What’s happened here is simple enough. One of the other companies Musk helped found, but no longer controls, ushered in a technological epoch with ostensible applications for nearly everything. Musk being Musk, he’s determined not just to harness that innovation and leverage it in his businesses, but in fact to monopolize everything from the production of the related hardware to the distribution of the necessary compute to the provision of consumer-facing services derived from the new technology. So, X must be xAI, xAI must be SpaceX and now SpaceX must be Tesla.
If… you know what? Let’s drop the pretense. When the merger happens, it’ll be the largest in corporate history.
Simply “adding” SpaceX and Tesla results in a futuristic behemoth with a market cap north of Amazon’s and just shy of Microsoft’s.
The combined entity would churn out everything from starships to androids to batteries to self-driving taxis to expensive compute to soccer mom bubble shuttles to politically-contigent satellite broadband to right-wing social media vitriol.
The only things missing would be the tunnels, mass-market flamethrowers and brain chip implants. And make no mistake: They’d get rolled up eventually too.
