Musk hints at possible Tesla-SpaceX merger, shares dip slightly

Author: Hillary Remy Source: TheStreet Read Time: 5 min

Elon Musk has a habit of answering the biggest questions about his companies without actually answering them. At the All-In Summit, he was asked directly why Tesla and SpaceX still operate as two separate companies. His response sounded like a riddle but landed like a signal.

The comment reignited a debate that has been building on Wall Street, where analysts, prediction markets, and even Musk's own business partners increasingly treat a Tesla-SpaceX combination as a matter of when rather than if.

Elon Musk's Latest Comments Hint at a Possible Merger

Speaking at the All-In Summit in Los Angeles on September 14, Musk was asked why the two companies remain separate given how closely they already work together. He called it a great question, then added:

"With all this collaboration, on so many levels, who can imagine what action one might take when there's so much close collaboration in so many areas."

— Yahoo Finance

When pressed further on the merger question, Musk said:

"Obviously, you know, we can't talk about combining companies on an earnings call. It's got to be done with the appropriate process."

— Yahoo Finance

This comment followed reports that Musk had discussed a merger with close colleagues ahead of SpaceX's June IPO.

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• Morgan Stanley doubles down on SpaceX stock for investors
• SpaceX analyst plots path to bold $100 billion claim
• JPMorgan resets SpaceX price target after earnings

SpaceX President Gwynne Shotwell, who joined Musk on stage, reinforced the sense that the companies are moving closer together in practice, even without a formal deal. She said SpaceX personnel had already moved into xAI to fill leadership and engineering gaps, describing the businesses as integrating "faster than I thought," though "not fully integrated yet," according to Stocktwits.

Musk's comments moved markets. Tesla and SpaceX shares each fell about 2% on September 14 before edging slightly higher in overnight trading, with TSLA recovering 0.2% and SPCX adding 0.1%, Stocktwits reported.

Terafab Is the Biggest Piece of the Puzzle

If there is one project that explains why merger speculation keeps resurfacing, it is Terafab. The joint chip manufacturing venture between Tesla, SpaceX, and xAI was confirmed in early 2026, with SpaceX announcing groundbreaking on the Grimes County, Texas facility in August. Musk described a facility aimed at producing more than one terawatt of AI compute hardware capacity per year, TechCrunch reported.

The ambition has only grown since then:

• Intel joined the project as an outside foundry customer, with Musk confirming Terafab will use Intel's forthcoming 14A manufacturing process.
• Musk said the full-scale facility could eventually produce 100 billion to 200 billion custom AI and memory chips annually.

The price tag has climbed just as fast:

• SpaceX disclosed in a May filing that the first phase alone would cost $55 billion.
• The full buildout could potentially reach $119 billion.
• ARK Invest has since floated an even larger long-term estimate of $1 trillion in total investment across the project's life, TheStreet reported.

Why Terafab Matters for Tesla

The stakes for Tesla specifically are significant. The company is counting on Terafab to reduce its reliance on outside chip suppliers like TSMC and Samsung. The custom silicon is meant to power:

• Tesla's self-driving systems
• Cybercab robotaxis
• Optimus humanoid robots

SpaceX President Gwynne Shotwell, who joined Musk on stage, reinforced the sense that the companies are moving closer together.