Musk says Tesla and SpaceX formed special committees to discuss merger: Live updates

What you need to know ahead of the earnings report:

• Capex and AI data center expansion
• Here’s why analysts are bullish on SpaceX heading into the report
• Tesla-SpaceX merger speculation

A fleet of Tesla Cyber trucks is parked at charging stations outside the SpaceX launch production facility in Starbase, Texas, U.S., July 20, 2026.

Steve Nesius | Reuters

Musk said the boards at Tesla and SpaceX have formed special committees to discuss a potential merger “at the request of shareholders,” noting that these groups “consist of independent directors.”

Because Musk is a “conflicted party,” he said he can’t be in the discussions.

“I do think there’s a lot of merit to combining the companies as we are pretty much in the superintelligence singularity, and there’s a lot to be gained from cooperating,” Musk said, referring to the development of software, chips and more.

“Do I think it would be a good idea? Yes,” Musk said. “But at the end of the day, the shareholders have to be supportive of this.”

Musk said that on the Tesla side, “we will need a 50% vote of all shares — not just those who vote — but of all shareholders, and that’s quite a high hurdle.”

Venture capitalist Ira Ehrenpreis is on the boards of both companies.

—Lora Kolodny

Musk said on the call that SpaceX aims to reach “volume production” of AI chips, now in development with partners Tesla and Intel, during the third quarter of 2028 at the Terafab factory that’s planned in Texas.

Musk thanked ASML and other suppliers for prioritizing equipment deliveries for the factory.

SpaceX secured significant tax incentives in June for the facility despite local opposition from residents concerned about the strain on local resources.

—Lora Kolodny

According to a report from the Wall Street Journal on Tuesday, Musk ordered restrictions on the use of Starshield, a military-grade version of Starlink, in Ukraine in recent weeks, impeding some military operations and the country’s ability to defend against intensifying attacks by Russia.

Musk previously pinned responsibility for any restrictions on the U.S. government and President Donald Trump, writing on X that, “Starshield systems are owned and controlled by the US government.”

The Journal, citing a person familiar with the situation, said Musk talked to senior administration officials, including Trump, “before imposing the new speed cap.”

The limits caused Ukraine’s drones to lose Starshield connectivity when traveling at speed over 100 miles per hour.

—Lora Kolodny

SpaceX said in its shareholder deck that AI growth was spurred by “the activation of new cloud services agreements, the acquisition of Cursor and increased Grok adoption.”

Of its $19.6 billion in capital expenditures in the quarter, more than $16.4 billion was committed to the AI business.

Musk said on the company’s call that SpaceX aims to “deploy power, cooling infrastructure at a rate that is vastly faster than anyone else.”

In its Memphis-area data centers, SpaceX’s AI business is on track to be able to bring 200,000 of Nvidia’s Grace Blackwell system online “every month for the remainder of this year.”

—Lora Kolodny

SpaceX Starship deploys a Starlink satellite into orbit on Sept. 28, 2026.

Source: SpaceX

SpaceX reported that its Starlink subscriber count rose to 13.6 million in the third quarter, with average revenue per user increasing to $69, up from 12 million Starlink subscribers and ARPU of $66 in the prior period.

The company boasted in an investor update that Starlink was activated in over 3,800 aircraft as of the quarter’s end. Customers include American Airlines.

Musk recently threatened Delta CEO Ed Bastian, saying he would lose his job because his airline has not yet made Starlink wireless internet available in their planes.

SpaceX is scheduled to hold its third-quarter earnings call at 4:30 p.m. ET. The company encouraged shareholders to submit questions online ahead of the meeting.

—Ari Levy

Tesla unveils its long-delayed Roadster nearly a decade after first revealing a next-generation version of its original electric sports ​car, at a launch event in Waco, Texas, Oct. 15, 2026

Source: Tesla

Musk’s other public company, Tesla, is scheduled to post third-quarter results on Wednesday. Analysts expect revenue at the electric vehicle maker to dip slightly from a year ago to $27.9 billion, according to LSEG.

Tesla shares are down about 17% this year as of Tuesday, leaving the company with a market cap of almost $1.5 trillion.

Correction: A prior version of this post had an incorrect market cap

—Ari Levy

CoreWeave and Nebius in October

SpaceX is relatively new to the cloud computing business. Many of its competitors in the space, the so-called neoclouds, have been getting hammered on Wall Street of late on concerns that rising interest rates are going to make the costly buildout financially burdensome.

CoreWeave and Nebius are down 28% so far in October, while IREN has plunged about 35%. Earlier this month, Australian AI data center operator Firmus withdrew its planned IPO, citing market volatility and conditions.

While SpaceX is far less reliant on that side of its business than are the neoclouds, capital costs still matter, and the company is banking on the AI boom continuing. In the second quarter, debt and finance leases increased to $36.8 billion, up from $22 billion the prior period.

—Ari Levy

Billboards in Times Square celebrate the SpaceX IPO debut at the Nasdaq on June 12th, 2026.

Adam Jeffery | CNBC

SpaceX stock chart.

Since opening at $150 on June 12, SpaceX shares have edged slightly lower, slipping to $147.50 on Tuesday. That gives Space a market cap of about $2 trillion.

The stock hit a low of $104.83 on Aug. 3, a few days before the first post-IPO lockup expired, making more than 911 million SpaceX shares available for trading.

The lockup lifted on Aug. 6, and the stock rallied, popping 6% initially, then nearly 16% the day after.

—Lora Kolodny

The SpaceX Starship and Super Heavy v3 Booster lift off on its 14th test flight from the SpaceX launch complex in Starbase, Texas, US, September 28, 2026.

Steve Nesius | Reuters

SpaceX continues to serve as a critical launch provider to the U.S. Defense Department and NASA.

The business hasn’t been historically profitable, but it’s the segment that captured the public’s interest in the rocket maker. In the second quarter, SpaceX reported launch revenue of $962 million and a net loss of $542 million.

Future profitability hinges on the success of SpaceX’s Starship mega-rocket, which is still being developed and tested.

Since the company’s last earnings call in August, SpaceX hit multiple milestones, reaching orbit and using Starship to deploy dozens of its new V.3 Starlink satellites during Test Flight 14. But the rocket is still far from reliable or reusable.

Investors are awaiting an update on pending NASA missions and the future of the older Falcon rocket. SpaceX has reportedly stopped allowing other companies to launch their cargo, including satellites, into orbit on Falcon missions.

—Lora Kolodny

A drone view shows the xAI Colossus 2 “Macrohard” data centre in Southaven, Mississippi, U.S., May 30, 2026.

Kevin Wurm | Reuters

In its first earnings report in August, SpaceX reported capital expenditures of $18.4 billion, with 80% of that going towards its artificial intelligence division.

That number spooked Wall Street, and shares dropped following the report.

SpaceX and xAI merged in February and the company has been pouring money into its effort to become a major player in AI, a market dominated by OpenAI, Anthropic and Google. The AI division also acquired Cursor in a $60 billion transaction and is now known as either SpaceXAI or SpaceXSI, with the “SI” standing for President Donald Trump’s preferred “Super Intelligence.”

—Lora Kolodny

A general view of a SpaceX building on the day of the company’s initial public offering (IPO), in Starbase, Texas, U.S., June 12, 2026.

Gabriel V. Cardenas | Reuters

Wall Street is sounding bullish on SpaceX ahead of its third-quarter earnings report, to be delivered after the bell on Tuesday.

Mizuho has an outperform rating on the stock and a $200 price target, per a Monday note from analyst Brett Linzey. Shares were trading around $148 as of 10:45 a.m. on Tuesday.

“AI is the largest swing factor for 3Q26 revenue and EBITDA. Consensus has AI revenue of $6.30B (+146% Q/Q from $2.56B) and AI adj. EBITDA of $3.32B (from $1.15B),” he wrote.

Analysts are expecting some conversation about deals or competitive plays with cable and telecom companies following SpaceX’s acquisition of low-band spectrum earlier this month.

“We expect initial strategic commentary centers around Connectivity and how SPCX can partner/compete its way into global markets, although we think low-band distribution becomes a meaningful intelligence lever over time,” Colin Canfield at Cantor Fitzgerald wrote in a Monday note. He has a price target of $246 and an overweight rating on the stock.

Oppenheimer’s expectations are more measured. The bank thinks the quarter will be “in-line” with “guidance reiterated.”

“Industry subscriber growth is slowing with limited room for pricing action, so focus is shifting from net adds and service revenue growth toward cost-cutting using AI, and lower subsidies/churn,” Timothy Horan at Oppenheimer told clients in a Tuesday note. He expects “more rational incumbent behavior” from SpaceX’s competitors.

–Tobias Burns

Musk said Monday that he’ll give every child in the U.S. one of his SpaceX shares next year.

With 72 million children under 18 in the U.S. as of July 1, 2025, according to official census data, that would amount a giveaway of about $10.5 billion worth of shares as of the current price.

Musk, the world’s richest person with a net worth of over $900 billion, said in a post on X that, “This will be the first of many,” without providing further details. However, when it comes to fulfilling his philanthropic promises, Musk has a spotty track record.

—Ari Levy

Ukrainian President Volodymyr Zelenskyy holds a press conference during the second day of the European Union leaders’ summit in Brussels, Belgium, on October 16, 2026.

Dursun Aydemir | Anadolu | Getty Images

A military tier of Starlink, marketed as Starshield, has drawn scrutiny of late as restrictions on the system in Ukraine hindered the country’s ability to defend itself against intensifying attacks by Russia.

Ukrainian officials said SpaceX and the Trump administration restricted Starshield without warning last week, causing Ukraine’s military forces to lose control of drones moving over 100 miles per hour, as the craft were relying on Starshield for connectivity at those speeds.

Musk said in a post on X that any changes to Starshield should be attributed to the U.S. government and President Donald Trump, though Trump later denied he ordered any such restrictions.

Ukraine President Volodymyr Zelenskyy told NBC’s “Meet the Press” on Sunday that the restraints remained in place over the weekend.

Investors, meanwhile, have poured capital into potential Starlink competitors, including Eutelsat.

—Lora Kolodny

After acquiring xAI in February with its data centers in and around Memphis, Tennessee, SpaceX struck lucrative cloud computing agreements, establishing a new revenue stream.

Deals with Google, Anthropic and Reflection AI, as well as an unnamed customer revealed by SpaceX CFO Bret Johnsen at an event last month, amount to potentially tens of billions of dollars in annual revenue for the company.

SpaceX is reportedly in talks to raise up to $40 billion to buy more Nvidia chips to support its AI ambitions.

Investors are looking for updates around this business for SpaceX as it seeks to monetize its AI capacity.

—Lora Kolodny

Ahead of earnings, investors are invited to submit questions for the call. One entry that got a lot of upvotes was about timing for a potential merger between SpaceX and Tesla, Musk’s automaker.

Musk’s companies have had business and financial relations for years, even sharing personnel and some board members.

Tesla invested $2 billion into xAI, which later converted into shares of SpaceX. The AI unit of SpaceX also spent about $430 million last year on Tesla’s Megapacks, which are battery energy storage systems, and $143 million on Cybertrucks.

With SpaceX hitting the public market in June, speculation about a more permanet tie-up has been swirling. SpaceX COO Gwynne Shotwell told CNBC ahead of the IPO that a merger “might make Elon’s life a little easier.”

A demo of Tesla’s next-generation Roadster last week stirred up further merger excitement among Musk fans. The new Roadster was developed with SpaceX and incorporates its technology, including cold gas thrusters, to enable the car to launch, hover and flip in mid-air.

—Lora Kolodny