Work has begun to potentially merge Tesla and SpaceX, Elon Musk said Tuesday of his two tech powerhouse companies.
Stocks of both companies rose sharply on Wednesday after Musk said that each had formed "special committees" to discuss a possible combination. The deal would be worth trillions of dollars, a massive melding of the world's biggest provider of rocket launches and satellite internet service with the second-largest electric vehicle maker.
Musk said a deal makes sense given the future of both companies relies heavily on artificial intelligence. The two have already combined forces in AI chip production and a possible — perhaps impossible — project to make flying cars.
At current market values, the combination would create a $3.5 trillion behemoth. The biggest company now on the market, chipmaker Nvidia, is valued at $5.2 trillion.
The combination had been rumored for months before Musk told financial analysts on a Tuesday conference call that dual committees of directors had been assembled to discuss the issue. He added that, as the biggest owner of both companies, he cannot interact with the committees and isn't even privy to their discussions.
"This is definitely the kind of question where I feel like I'm tap-dancing through a minefield," Musk said on the third-quarter earnings call for SpaceX, Fortune reported.
With Wednesday's gains in Tesla and SpaceX, Musk regained the status of the world's first and only trillionaire. Forbes estimates his net worth at $1.004 trillion, up $80 billion after a few hours of trading.
Many lawmakers, most conspicuously Democrats, think Musk has too much power already and may want to crack down on his companies in a way that could hurt them most — federal contracts and regulation.
SpaceX has huge contracts with the federal government, and hopes for many more as NASA aims to put astronauts on the moon again soon. Meanwhile, Tesla is already the target of several safety investigations over the driver assistance software that Musk is hoping to use to turn millions of his cars into completely autonomous, self-driving vehicles and taxis.
The Democrats could scuttle things should they win big in the midterm elections next month.
"Some people out there assume that a SpaceX and Tesla merger is a certainty," Musk said. "I think that would be overstating it."
One person confident the merger will go through is Shark Tank's Kevin O'Leary, who posted Saturday on X that there was "no question that Tesla's going to merge with SpaceX."
"So if you own Tesla stock, you're going to own New Co.," he said in the post. "If you already own SpaceX, hang in. You're going to own Tesla. It's going to happen that way."
The Associated Press contributed to this story.
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