Elon Musk’s biographer believes Tesla and SpaceX are destined to merge, arguing their increasingly intertwined technology ambitions make keeping them separate almost impossible.
“It’s almost inconceivable that you would not merge these companies now,” Walter Isaacson, a Tulane professor and Perella Weinberg advisory partner, told CNBC Friday.
Musk himself has been more cautious, warning last month that assuming a merger is certain “would be overstating it.”
Isaacson’s comments come as Tesla Inc. (NASDAQ:TSLA) and Space Exploration Technologies Corp. (NASDAQ:SPCX) advance merger negotiations, with Bloomberg reporting Thursday that an announcement could come as early as December.
Bettors Doubt a December Deal
On Polymarket, the probability of an official merger announcement by Dec. 31 jumped from roughly 10% a week ago to 31% Friday.
Traders are more confident over a longer timeline, pricing an 81% chance by the end of 2027. The markets have attracted approximately $1.77 million in combined volume.
Isaacson expects more clarity at Tesla’s Dec. 3 shareholder meeting.
“I definitely think this merger is going to play out,” he said. “I don’t know if it’ll all be solved by then, but it’s something that’ll be discussed.”
‘It Makes No Sense Otherwise’
Isaacson’s confidence comes down to Terafab, the enormous semiconductor manufacturing project Tesla and SpaceX are developing together.
“They’re interconnected in doing it,” he said. “I think you have to have a merger, it makes no sense otherwise.”
Tesla needs specialized chips for self-driving vehicles and Optimus robots, while SpaceX wants computing power for AI infrastructure and potential orbital data centers.
Isaacson also pointed to the problems facing Nvidia Corp. (NASDAQ:NVDA), saying the merger makes even more sense “in an era when Nvidia is having such problems.”
Musk’s companies remain major Nvidia customers, and Isaacson doesn’t expect that relationship to end.
“I assume they’ll still get those deliveries of chips, that’s not going to stop,” he said.
But he believes the AI5 and AI6 chips Tesla and SpaceX are designing together could provide an alternative supply within two or three years, including processors configured to work in space.
The $3.45 Trillion Question
There is one question Isaacson didn’t answer.
CNBC’s interviewer asked whether Tesla shareholders would receive a takeover premium or simply exchange their shares for SpaceX stock.
Isaacson instead explained why the companies needed to merge.
With a combined valuation of approximately $3.45 trillion, the transaction could become the largest merger in history.
But the recent SpaceX stock slump has complicated the calculations, and Tesla’s Dec. 3 meeting has no merger vote scheduled.
Isaacson may be convinced the companies belong together. Whether shareholders agree could depend on the price.
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