Sure, let’s smoosh SpaceX and Tesla together, who cares

SpaceX is reportedly preparing to take on significant financial risk as it seeks to borrow another $40 billion, primarily for the acquisition of Nvidia chips. Despite this looming debt, the company, along with Tesla, has established special committees to explore the possibility of a merger.

While there are certainly financial incentives for Elon Musk tied to such a merger, the implications extend beyond just personal gain. The potential merger's appeal may depend on how much one believes Musk's vision of establishing a human presence on Mars or, as he described in a recent SpaceX earnings call, "spreading the light of consciousness." A realistic assessment indicates that current technology is insufficient to support human life in space, necessitating the use of robots. However, the delay in communication between Earth and distant locations like Mars presents challenges in controlling these robots remotely. Therefore, the development of autonomous robots capable of independent decision-making becomes a crucial next step.

Musk emphasized the benefits of merging SpaceX and Tesla during the recent earnings call, stating that there is "a lot to be gained from cooperating on developing superintelligence software." However, it is worth noting that SpaceX's primary business does not currently revolve around artificial intelligence, which Musk refers to as "superintelligence." In the third quarter earnings report, SpaceX revealed $7.56 billion in revenue attributed to its AI sector, with "SI solutions & infrastructure revenues" surging to $7 billion—more than triple the amount from the previous quarter. A significant portion of this increase can be attributed to the recent integration of the Cursor project, which contributed $608 million in revenue. Analysts suggest that much of the remaining revenue likely comes from providing computational resources to companies like Anthropic and Google, while the contributions from Grok may be minimal.

When comparing this revenue to that of Anthropic, which reported $16.3 billion in revenue for the first half of this year, SpaceX's AI business appears to be more comparable to companies like CoreWeave rather than Anthropic. Although SpaceX's press release mentioned increased adoption of Grok among enterprise clients and consumers, specific numbers were not disclosed, leading to speculation about the actual performance of this segment. If the results were impressive, Musk would likely highlight them.

On the other hand, Tesla's third-quarter earnings report revealed disappointing results, marking a second consecutive quarter of declining profits. This downturn is attributed to Musk's apparent shift in focus away from conventional vehicles toward robotics and autonomous taxi services. Although Tesla showcased a prototype of a new Roadster, it is not expected to enter production for several years, and its high cost raises questions about its viability. Musk did not provide further details regarding the merger during Tesla's earnings call.

SpaceX and Tesla have already established some collaborations, including SpaceX's purchase of $131 million worth of Cybertrucks and prior investments in Tesla bonds. Moreover, the two companies have announced joint ventures in AI projects like Terafab and Macrohard. Terafab is a chip-manufacturing initiative Musk plans to develop in Texas, with Intel as a partner to help create the necessary technology. Macrohard is described as an AI project that simulates existing Microsoft software, although details remain vague since its announcement in March.

Musk's history of setting ambitious timelines for his companies often leads to missed deadlines, as noted by Reuters. In May, SpaceX's S-1 filing indicated that Terafab and Macrohard were still in the early stages, with many details—including financial terms and intellectual property rights—yet to be finalized. Intel's CEO recently reaffirmed the company's commitment to the Terafab partnership, but there is no obligation for Intel to remain involved, and the S-1 suggests that a definitive agreement may never be reached. As of the latest updates, there has been no confirmation of any signed agreements regarding these projects.

During the recent investor call, Musk stated that Terafab aims to achieve volume production in the latter half of 2028, with the first test chip expected by May or June 2027. However, when asked about orders for the necessary manufacturing equipment, Musk did not provide a response. While companies often engage in more private activities than they publicly disclose, the absence of recent mentions of Macrohard and Terafab in official reports raises questions about their current status and future viability.