Sky’s not the limit: $5 trillion sci-fi deal could bring Musk closer to Mars

October 22, 2026 — 11:26am

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The industrial and financial logic of a merger of SpaceX and Tesla, which Elon Musk has revealed is being evaluated, is compelling – for shareholders, and for the world’s richest man personally.

The prospective combination being assessed by a special committee of both companies’ boards would create an entity with a $US3.6 trillion ($5.1 trillion) market capitalisation, ranking behind only Nvidia ($US5.7 trillion), Apple ($US4.9 trillion), Alphabet ($US4.1 trillion) and Microsoft ($US3.8 trillion) in market value.

Market size isn’t an end in itself, but it would make it easier for Musk to raise the massive volumes of equity and debt needed to feed the voracious appetite for capital that the two companies require for their increasing investments in artificial intelligence.

It would give Musk access to Tesla’s cash and free cash flows –$US15.22 billion and $US1.53 billion in the September quarter – to help fund SpaceX’s accelerating spending on AI. About $US16.4 billion of SpaceX’s $US19.6 billion of capex in the third quarter was devoted to AI, and it has said its total capex in the December quarter could be as much as $US40 billion.

At face value, combining SpaceX’s rockets, satellites, AI and social media platform with Tesla’s electric vehicles, batteries and solar might not appear as compelling, but there would be plenty of potential synergies available if they were merged.

Apart from the fact that Tesla does supply SpaceX with billions of dollars worth of batteries, graphics processing units, software and even Cybertrucks, and is joint-venturing a chip-making factory with SpaceX, Tesla is increasingly an AI company itself – its self-driving vehicles and robots are powered by AI.........

© Brisbane Times