Tesla, SpaceX Weigh $3.4 Trillion Merger as Tesla Profits Fade
Updated
Updated · Fortune · May 31
Tesla, SpaceX Weigh $3.4 Trillion Merger as Tesla Profits Fade
2 articles · Updated · Fortune · May 31
$3.4 trillion is the implied value of a combined Tesla-SpaceX if SpaceX buys Tesla near its expected $1.75 trillion IPO valuation, creating what would be the largest merger ever.
The logic is to use SpaceX's richly valued stock to absorb Tesla, whose market cap remains high even as GAAP net income fell to $3.9 billion over the past four quarters from $15 billion in 2023.
A deal would sharply dilute SpaceX holders: matching Tesla's $1.65 trillion valuation would require new shares equal to about 94% of SpaceX's current count, before any takeover premium.
The financial case is strained because the combined company would still be unprofitable on recent numbers—about a $1 billion annual GAAP loss—and both businesses face heavy capital spending needs.
Those demands include SpaceX's $14 billion free-cash-flow deficit last year and Tesla's planned capex of at least $22.5 billion for the final nine months of this year, raising doubts that a merger would solve more than Tesla's valuation problem.
Is merging Tesla and SpaceX a desperate bailout or the birth of an AI superpower?
With Musk on both sides of the deal, who protects shareholders in the world's largest merger?
Can a $3.4 trillion company with no profits deliver real returns to its investors?
The $3.4 Trillion Question: Will Tesla and SpaceX Merge to Form Musk’s AI Super-Empire?
Overview
As of May 31, 2026, speculation is growing about a possible merger between Tesla and SpaceX, two companies led by Elon Musk. This potential consolidation is being considered as SpaceX prepares for a public offering, with the recent availability of the SPCX ticker fueling rumors about its IPO plans. If SpaceX reaches a $7.5 trillion market cap, it could trigger a major payout for Musk. Meanwhile, SpaceX has secured a $4.16 billion contract from the U.S. Space Force for the Space Data Network, highlighting its expanding role in advanced communications. These developments set the stage for significant changes in both companies’ futures.