AIBusinessReportSure, let’s smoosh SpaceX and Tesla together, who caresYes, of course there are pay package incentives in play for Musk. But that’s not all.by Elizabeth LopattoOct 22, 2026, 7:45 PM UTCShareGiftMars not depicted. | Image: Cath Virginia / The Verge, Getty ImagesAIBusinessReportSure, let’s smoosh SpaceX and Tesla together, who caresYes, of course there are pay package incentives in play for Musk. But that’s not all.by Elizabeth LopattoOct 22, 2026, 7:45 PM UTCShareGiftElizabeth Lopatto is a reporter who writes about tech, money, and human behavior. She joined The Verge in 2014 as science editor.
Previously, she was a reporter at Bloomberg.Oh sure, SpaceX’s credit risk is pretty high because it’s about to borrow another $40 billion to spend on Nvidia chips, but who cares about that? SpaceX and Tesla have formed special committees to discuss a merger!The degree to which you find this merger compelling likely has to do with the degree to which you believe Elon Musk about wanting to go to Mars, or “spread the light of consciousness,” as he put it in this week’s SpaceX earnings call (and earlier S-1). Now, a reasonably informed person knows that we don’t have the technology — or, frankly, even the raw information to build the technology — in order to support human life in space. So that means robots.
But a lag between Earth and the Moon or Mars makes for difficulty in controlling the robots. So having artificially intelligent robots who can make decisions on their own with minimal supervision from Earth is the next sci-fi logic step.“There’s a lot to be gained from cooperating on developing superintelligence software.”If you believe Musk’s story, the technology we are talking about is being developed through self-driving cars (Tesla), LLMs (SpaceX), and humanoid robots (Tesla), all of which require data centers (SpaceX). Conveniently, we have just had earnings for both companies. On the other hand, if you view Mars as a useful fiction Musk uses to explain his antics in public, well, there’s a lot of money and a lot of control Musk gets from the merger.Musk said on the recent SpaceX earnings call that “there’s a lot of merit to combining” SpaceX and Tesla.
Why? “There’s a lot to be gained from cooperating on developing superintelligence software.” But artificial intelligence — ah, excuse me, super intelligence software isn’t the business SpaceX is really in right now. In its Q3 earnings on Tuesday, SpaceX reported $7.56 billion in revenue from the artificial intelligence — sorry, sorry, super intelligence division. The subcategory “SI solutions & infrastructure revenues” — which I think is Grok, Cursor, and the neocloud business wrapped together — jumped to $7 billion, or more than three times what it was last quarter. Now some of this was getting Cursor stapled on, which added $608 million in revenue.
Most of the rest of that $7 billion was likely renting out compute to Anthropic and Google; Grok is probably contributing less, says Gil Luria, an analyst at DA Davidson.At first blush, this may look comparable to the revenue of a company like Anthropic, whose leaked S-1 shows the company had $16.3 billion in revenue in the first half of this year from its frontier models. But SpaceX’s AI business looks more like CoreWeave than Anthropic. While we are told in the press release there was “increased Grok adoption across enterprise customers and consumers,” that number wasn’t broken out from bare-metal revenue. And if Musk wanted to brag about it, he would.As for Tesla, which released Q3 results on Wednesday, its earnings sucked — a second consecutive quarter of declining profits.
That’s because Musk is apparently not especially interested in normal cars anymore. Instead, Tesla is focusing on robots and, I guess, self-driving taxis. (There was also a Roadster hopping car demo recently, but that’s not going into production for a couple years, it’s very expensive, and Tesla cannot guarantee it will be delivered.) Musk did not elaborate on his comments about the merger on the Tesla call.SpaceX and Tesla have some tie-ups already; SpaceX, for instance, bought $131 million of the low-selling Cybertrucks from Tesla. It has, in the past, held Tesla bonds. More crucially, the companies have also announced two AI — fuck it, we’re just sticking with AI — projects together: Terafab and Macrohard.Terafab is the chip-making venture that Musk intends to build in Texas and run to supply himself with chips; Intel is partnered, kinda, with Musk to develop the technology.
Macrohard is, uh, an AI project that lets people simulate software already made by Microsoft. At least, I think that’s what it’s supposed to be. Typing the name of the latter makes me pray for the asteroid to hit us all right now, so perhaps it’s fortunate that we haven’t heard much about it since the announcement in March.“Musk has a history of setting timelines that his companies have missed,” Reuters notes, with a degree of what I can only describe as wry understatementSpaceX’s S-1 from May said that Terafab and Microhard “are in the very early stages, as a result of which we and Tesla have not finalized a variety of details relating to our collaboration, including, but not limited to, financial terms, intellectual property rights, and the ultimate term of our collaboration.” As of earlier this month, Intel’s CEO said the company remained committed to the partnership, but it’s not obligated to remain part of Terafab and the S-1 says there may never be a definitive agreement. Intel’s Thomas Hannaford didn’t immediately respond to my emails asking if anything had been signed in the interim.On this week’s call with SpaceX investors, Musk claimed the Terafab will reach volume production in the second half of 2028.
He also said the company will have its first test chip from the facility in May or June 2027. “Musk has a history of setting timelines that his companies have missed,” Reuters notes, with a degree of what I can only describe as wry understatement. When an analyst on the call asked if Musk had placed orders for machines needed to make cutting-edge equipment, Musk did not answer.Companies often are doing more privately than they announce publicly, so I do not view the S-1 filing as fully definitive. But Macrohard isn’t mentioned in the last 10Q. Neither is Terafab.Musk is going to pound the table about the Moon, Mars, “and beyond,” and a significant chunk of his fan base is very into this.
But there are maybe some boring financial reasons shareholders may have an interest.Let’s say you are constitutionally very different from me, and much richer, and for this reason you own a number of shares in Tesla. You’re a big believer in Elon Musk — obviously — but you notice that the man has an attention span of a squirrel on cocaine. He’s on X basically constantly and often racistly. He keeps showing up at the White House to do stuff that pisses off would-be Tesla customers.
Then he publicly feuds with the president. Sometimes he’s very excited about rockets, and sometimes he’s very excited about Dogecoin and sometimes he’s really into Grok and sometimes he thinks about cars. But you notice that one way or the other he’s been thinking about cars a lot less lately.Basically all you have to do is say “Nvidia” and someone will give you a fuckton of moneySince he seems to be focused — insofar as he can be said to focus — on AI, you notice some pretty big conflicts of interest. Musk’s companies “all need the same scarce Nvidia chips to power their AI, for instance,” notes Matt Levine, a longtime Musk observer.
But if you combine the companies, well, maybe you build the best general-purpose AI. And then? “If you build the best general-purpose AI model, maybe it can drive the cars and operate the robots and upload people’s brains and serve right
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