UAE Digital
– This is the script of CNBC's financial news report for China's CCTV on October 21, 2026. Expectations for a merger between SpaceX and Tesla have long circulated across the market. While a consensus views a consolidation as the eventual outcome, and current market probabilities suggest a greater than 50% chance of the deal closing before next March, analysts emphasize that completing such a transaction remains exceptionally complex given valuation discrepancies and stringent regulatory reviews.
ROSS GERBER President and CEO Gerber Kawasaki Wealth & Investment Management "It went public, it's like the valuations have changed. And I can't even imagine how many lawyers I'd have to deal with trying to pull this off." Market wagers on a combined entity center primarily on the strategic potential for Elon Musk to establish an end to end artificial intelligence ecosystem. Under a unified architecture, SpaceX could expand artificial intelligence, satellite, and data center operations, while Tesla advances autonomous robotaxis and humanoid robotics initiatives.
Meanwhile, the joint Terafab semiconductor manufacturing venture would supply proprietary chips across all business lines. While horizontal integration expands Musk's industrial footprint, a merger does not automatically translate into enhanced returns for investors, particularly Tesla equity holders. Current market projections point toward an all stock transaction, meaning SpaceX would not acquire Tesla shares for cash, but rather issue new SpaceX equity to Tesla shareholders based on a negotiated swap ratio.
Consequently, the exchange ratio alongside SpaceX share price performance prior to closing will dictate realized shareholder returns. Nevertheless, analysts caution that evaluating the deal requires assessing whether the combined entity can generate distinct operational synergies and unlock long term expansion potential. GENE MUNSTER Managing Partner Deepwater Asset Management "You almost have to set aside the analytical piece about the you know what's Tesla trading at versus what SpaceX is trading at and all that.
It is powerful when you put these two companies together. It really reinforces the whole narrative that Elon's been building for the last decade around the power of AI." Beyond structural synergies, sustained long term shareholder returns depend on whether SpaceX can continuously fund the intensive capital expenditures required for artificial intelligence infrastructure expansion. Financial disclosures indicate that SpaceX racked up nearly 48.1 billion dollars in capital expenditures over the first three quarters of this year, with approximately 40 billion dollars dedicated to artificial intelligence compute and underlying infrastructure.
By contrast, operating cash flow over the same period reached only roughly 13.1 billion dollars. This capital intensive model forces SpaceX to rely heavily on debt financing or external liquidity to bridge cash deficits, a dynamic analysts warn remains a key drag on market sentiment.
Source: CNBC
