Musk is preparing a $3.5 trillion merger. Why does he want to merge Tesla and SpaceX before Trump

Musk preparing a $3.5 trillion merger. Why he wants to unite Tesla and SpaceX before Trump ends his term Elon Musk has paved the way for a possible merger between Tesla and SpaceX, which would create a giant valued at $3.5 trillion. This is the latest step in a multi-year strategy by which the billionaire has gradually integrated the companies, and the transaction is expected to be finalized before American President Donald Trump ends his term, according to Euronews. The world's richest man confirmed this week that Tesla and SpaceX are analyzing the possibility of a merger. Together, the two companies are valued at approximately $3.5 trillion (€3.1 trillion), which could make the operation the largest merger in history. The transaction would represent the culmination of a series of operations through which Elon Musk has increasingly brought his businesses closer. According to Bloomberg, citing sources familiar with the discussions, the goal is for the merger to be finalized while Donald Trump is still in the White House. A potential merger between Tesla and SpaceX would mark a new stage of a process that began a decade ago when Musk started integrating his companies. In 2016, Tesla bought SolarCity, a company specializing in solar panel installation, led by his brother. The transaction was contested in court for many years before being validated by a Delaware court. In March 2025, his artificial intelligence startup, xAI, acquired the social network X, previously known as Twitter, which Musk bought in 2022 for $44 billion (€39.1 billion). In February this year, SpaceX absorbed xAI, in a transaction that valued the rocket manufacturer at $1 trillion (€890 billion) and the AI company at $250 billion (€222 billion), before SpaceX's IPO. Four months later, SpaceX listed on Nasdaq, attracting $85.7 billion (€76.3 billion) in what was one of the largest initial public offerings in history. Overall, these transactions appear to be part of a long-term plan to reunite Musk's businesses into a single publicly traded group. The billionaire himself has spoken about an "increasing overlap" between Tesla and SpaceX activities during an investor conference in July. On Tuesday, during a conference on SpaceX's financial results, Musk told analysts that both companies have formed committees made up of independent board members to analyze a possible merger. He described the idea as "good," but admitted he has a feeling that it is "dancing between me," referring to the difficulties and risks of such an operation. Why Musk wants to unite Tesla and SpaceX into one company Elon Musk maintains that artificial intelligence will determine the development direction of both companies. Tesla and SpaceX are already collaborating on the development of Terafab, an AI chip factory in Texas. At the same time, Tesla's autonomous cars and Optimus humanoid robots could benefit from the computing power that SpaceX is trying to develop, including through its orbital data center projects. And financial results could support such an operation. SpaceX reported its first quarterly profit since its IPO, amounting to $4.4 billion (€3.9 billion), as revenues grew by 161%. However, the company's capital expenditures reached $19.6 billion (€17.4 billion) in the same quarter, with the largest part of the investment directed toward artificial intelligence. In contrast, a day later, Tesla announced a 43% drop in net income, down to $787 million (€700 million), while revenues stagnated at $28 billion (€24.9 billion) and deliveries fell by 2%. In the event of a merger, the accelerated growth of SpaceX's revenues could compensate for Tesla's weaker results. Uniting the two companies would also allow Musk to coordinate all operations within a single structure, facilitating the transfer of engineers and resources between different divisions, without the reporting obligations or risks of litigation associated with inter-affiliated entity transactions. Another potential advantage is the consolidation of control over the businesses. Musk owns approximately 48% of SpaceX and controls over 80% of voting rights through special shares. In contrast, his stake in Tesla is only about 20%. Since 2024, the billionaire has repeatedly stated that he is not comfortable transforming Tesla into an AI and robotics leader without holding at least 25% of the voting rights. The merger could also bring him additional financial gains, as his compensation package from Tesla stipulates that certain performance targets are considered met upon the realization of specific types of mergers. Why Musk wants to finalize the merger before Trump leaves the White House According to Bloomberg, citing sources familiar with the negotiations, the goal is for the merger agreement to be announced in the first half of 2027, and the transaction to be finalized before American President Donald Trump concludes his term in January 2029. Finalizing the operation during the Trump administration could ensure a more favorable political climate, although the transaction would still be analyzed by regulatory authorities and shareholders. Musk, who coordinated the Trump administration's budget reduction campaign in 2025 before the relationship between the two deteriorated publicly, later reconciled with the American president and returned to administration. The billionaire has also become one of the largest known donors to Republican candidates for next month's US legislative elections. According to an America PAC spokesperson, the conservative political organization supported by Musk, he has donated over $276 million (€245 million) since July. A potential victory for Democrats could lead to stricter oversight of SpaceX's federal contracts and Tesla's autonomous driving software. SpaceX warned in documents filed for its IPO that a change in the balance of power in Congress could have a "significant and negative impact on our growth and competitive position." Currently, the committees of the two companies have not reached an agreement on the terms of a possible merger. Any transaction would require the approval of holders of more than half of Tesla's total shares, a condition that Musk has described as "quite a difficult obstacle to overcome." The billionaire warned that the merger is not certain. Tesla shareholders are set to meet on December 3rd. Editor: S.A. Follow Digi24.ro news and Google News