Elon Musk has a habit of answering the biggest questions about his companies without actually answering them. He was asked directly at the All-In Summit why Tesla and SpaceX still operate as two separate companies. He gave an answer that 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,” according to Yahoo Finance.
At the same event, Musk also addressed the merger question more directly when pressed further. “Obviously, you know, we can’t talk about combining companies on an earnings call. It’s got to be done with the appropriate process,” he said. A comment that itself followed reports he had discussed a merger with close colleagues ahead of SpaceX’s June IPO.
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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,” Stocktwits reported.
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 has described a facility aimed at producing more than one terawatt of AI compute hardware capacity a 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. He 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 of the facility alone would cost $55 billion, with the full buildout potentially reaching $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.
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, with the custom silicon meant to power its self-driving systems, Cybercab robotaxis and Optimus humanoid robots.
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Wall Street is split on whether a deal happens
Not every analyst agrees on timing, but several now treat a merger as increasingly likely. Wedbush’s Dan Ives has put the odds of a Tesla-SpaceX combination at 80% to 90%, telling Schwab Network he expects a deal to take shape in the first half of 2027. SpaceX’s IPO would also make a stock-based combination more straightforward, TheStreet reported.
Jefferies has gone further than most in modeling what a deal could look like, estimating Musk could retain roughly 55.3% voting control in a combination structured as a nil-premium transaction. A framework that would still leave room for Tesla shareholders to receive value.
JPMorgan has taken a more cautious but still directionally similar view, calling a tie-up strategically coherent on paper given the overlapping ambitions in artificial intelligence, robotics, energy, transportation and space that already connect the two companies.
Not everyone is convinced a merger would help investors. BNP Paribas maintained an underperform rating on Tesla, warning that SpaceX’s own cash burn could delay a potential combination and that shareholders hoping for a quick premium may be waiting longer than they expect.
What it means for Tesla and SpaceX investors
The financial ties between the two companies are already deep enough to matter regardless of whether a formal merger ever happens. Tesla holds an equity stake in SpaceX that traces back to its $2 billion investment in xAI, which converted to SpaceX equity after SpaceX absorbed the AI company, representing less than 1% of SpaceX. A relationship that has already appeared in regulatory filings through commercial and other agreements, according to TheStreet.
There is a near-term product event that could reinforce the collaboration narrative regardless of merger talk. Tesla’s second-generation Roadster is confirmed to debut on October 1, and Musk has hinted that the production version may incorporate SpaceX thruster technology.
For now, investors are left where they have been for months, parsing Musk’s carefully worded non-answers for clues rather than getting a clear commitment. Until Musk or either company’s board says otherwise, the safest assumption remains that deeper collaboration, not necessarily a formal merger, is the only thing guaranteed to keep happening.
Related: Morgan Stanley sends blunt SpaceX message to investors
