Elon Musk has again raised the possibility of a merger between Tesla (TSLA Quick QuoteTSLA - Free Report) and SpaceX (SPCX Quick QuoteSPCX - Free Report) . His latest comments are notable because the two companies are already working closely.

At the All-In Summit in Los Angeles, Musk was asked why Tesla and SpaceX remain separate companies given their growing overlap. Rather than dismissing the idea, he pointed to the extent of their cooperation and suggested that further integration is possible.

As Musk put it, “With all this collaboration, on so many levels, who can imagine what action one might take when there’s so much close collaboration in so many areas.”

While he stopped short of confirming a deal, the comments add to speculation that the two companies could eventually become more closely integrated.

The Integration Is Already Underway

The relationship goes well beyond a common founder.

SpaceX President Gwynne Shotwell said SpaceX employees have already moved into xAI to help fill leadership and engineering gaps, as cited in Teslarati. She also said the integration has been happening faster than she expected.

On Tesla's second-quarter 2026 earnings call, when Musk was asked about a Tesla-SpaceX merger and whether it made strategic sense, he didn't dismiss the idea. Instead, he acknowledged that the two companies are becoming more closely intertwined.

Tesla and SpaceX are working together on technology. Tesla has invested in SpaceX and entered into an agreement covering joint projects such as Terafab and Digital Optimus. The financial relationship is becoming meaningful as well. Tesla recorded a $1 billion mark-to-market gain on its SpaceX investment in the second quarter of 2026.

A Shared Bet on AI Chips

Terafab is particularly important for Tesla. The project is aimed at producing advanced AI chips that Tesla needs for Optimus and its broader AI ambitions.

For Tesla, securing enough computing capacity is important as it expands beyond electric vehicles into autonomous driving, robotics and AI. A closer relationship with SpaceX could give Tesla access to capital, engineering talent and infrastructure that would otherwise take years to build independently.

Digital Optimus provides another example. SpaceX's AI capabilities are being used alongside Tesla's robotics work, showing that the companies are sharing technology rather than simply doing business with each other.

The Synergies Run Both Ways

The overlap runs through daily operations too. SpaceX shows up as a paying Tesla customer— sourcing energy storage hardware and even picking up Cybertrucks for its own use. Meanwhile, Tesla is pulling SpaceX and xAI technology back into its own vehicles. Grok is being built into Tesla cars and reportedly powers parts of Optimus's digital brain. Starlink connectivity is going into the Cybercab, with plans to roll it out fleet-wide, as robotaxis need reliable connectivity to truly go autonomous everywhere.

While Tesla carries a Zacks Rank #4 (Sell) currently, SpaceX carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Why Investors Keep Asking "When," Not "If"

Neither company's valuation today rests mainly on its original business. Tesla isn't just an EV maker anymore. Its stock price increasingly reflects bets on autonomy, robotics, and AI-driven manufacturing. SpaceX isn't just a rocket company either— it's expanding into satellite communications and AI infrastructure.

Beyond having the same founder, both companies are being built on the same underlying layer— AI models, custom chips, and shared compute ambitions.

That doesn't make a merger inevitable. But as the overlap in technology, talent, capital and operations continues to grow, the case for combining the businesses becomes harder to ignore. Musk hasn't confirmed a merger yet, but his latest comments suggest that it’s only a matter of time.