Elon Musk stated on Tuesday his support for a potential merger between SpaceX and Tesla. This statement came amidst news that the rocket and AI company achieved quarterly profit for the first time since its IPO, driven by contracts to rent computing power to artificial intelligence firms.
During a conversation with analysts, when asked about a possible consolidation, Musk noted that he feels like he is 'dancing on a minefield,' but believes such a merger 'would be a good idea.' Following these comments, SpaceX shares rose nearly five percent in over-the-counter trading.
Musk reported that special committees of independent directors have been established in both companies, SpaceX and Tesla, to study this idea at the request of shareholders. Nevertheless, he emphasized that he cannot participate in the discussions due to a conflict of interest.
He clarified that he is the CEO of both companies, as well as the Chairman and CTO of SpaceX. According to regulatory filings, as of June 30, he owned 48.4 percent of SpaceX and controls over 82 percent of its voting power through super-voting shares. Additionally, he owns about 20 percent of Tesla.
Musk warned that the committees have not yet agreed on the terms of any deal, and there is no guarantee they will. He noted that viewing the merger as a certainty would be an exaggeration. He also pointed out that any deal would require approval from the majority of all Tesla shares, not just those cast votes, which he called a 'quite high barrier.'
In his view, both companies could benefit from collaboration in AI software, chip design, robotics, and space computing.
Financial Results of SpaceX
These remarks came after SpaceX announced a net profit of $4.4 billion for the period from July to September, contrasting with a loss of $1.1 billion the previous year. The company's revenue increased by 161 percent, reaching $14.6 billion. These quarterly results followed a challenging start on Wall Street.
SpaceX began trading on Nasdaq on June 12 following its IPO, which priced at $135 per share and raised approximately $85.7 billion. Its first earnings report as a public company showed second-quarter revenue of $7.8 billion and a net loss of $541 million. It should be noted that the AI division, which SpaceX now calls 'Super Intelligence,' was the driving force behind this improvement.
This division generated revenue that grew more than ninefold compared to the previous year, reaching $7.6 billion, surpassing the satellite internet business Starlink as the company's largest source of sales.
Cloud Computing
SpaceX attributed its success to new cloud service agreements, wider adoption of its chatbot Grok, and the acquisition of Cursor, an AI coding startup. Among the clients of SpaceX's cloud services is Anthropic, which agreed in May to pay nearly $45 billion over three years for computing power in SpaceX's Colossus data centers. In June, Google signed an agreement to pay $920 million monthly from October to June 2029.
The AI division achieved an operating profit of $431 million, compared to a loss of $1.7 billion the previous year. Despite this, expenses remain high. SpaceX invested $19.6 billion during the quarter, of which $16.4 billion went to AI, bringing capital expenditures for the first nine months of the year to $48 billion.
The company's computing capacity reached 1.7 gigawatts, up from 0.6 gigawatts the previous year. Musk expressed confidence that SpaceX will be able to bring an additional 10 gigawatts of computing power online in 2027. This will be added to approximately 2.5–3.0 gigawatts that, according to his projections, will be operational by the end of the current year. He added that power supply, cooling, and electrical equipment are 'somewhat limiting factors.'
Revenue from the Starlink satellite internet division grew by 69 percent to $5.2 billion, and the number of consumer subscribers reached 13.6 million. However, the average monthly revenue per user decreased from $83 to $69 compared to last year. Furthermore, SpaceX conducted the first commercial flight of Starship, a massive rocket key to Musk's ambitions for Mars and large-scale satellite deployment. This flight delivered 26 next-generation Starlink satellites into orbit.