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Musk Hints at Merging Tesla and SpaceX on Earnings Call: One Trillionaire, One Company for Cars, Robots, Rockets, and AI · Minds, Bodies, and Terawatts

• 0:00
  [Host] This is Minds, Bodies, and Terawatts, the show where one man's companies keep finding more and more overlap. Electrek reported on July 22 that on Tesla's second-quarter earnings call, Elon Musk hinted at merging Tesla with SpaceX, and his closest thing to a denial was that it can't be discussed on an earnings call.
• 0:19
  [Guest] His actual words: there's "more and more overlap" between the two, and then he handed the question to Tesla's general counsel and "the appropriate process." That is not a no. It lands weeks after SpaceX's two-trillion-dollar stock market debut, the one that made Musk the first trillionaire in history.
• 0:37
  [Host] Set the merger talk aside. Was it even a good quarter for Tesla?
• 0:41
  [Guest] Great for cars, rough for cash. Tesla delivered about 480,000 vehicles, up 25 percent from a year ago, but per MarketBeat, free cash flow went negative because capital spending more than doubled in a single quarter.
• 0:54
  [Host] Spending on what? It doesn't sound like it's on making cars.
• 0:58
  [Guest] On everything else. Tesla says it will spend over 25 billion dollars this year, nearly triple last year, across robotaxi fleets, Optimus robot production, chip fabs, solar factories, and AI compute. Musk told analysts it's OK to be a little less capital efficient if things get done sooner.
• 1:16
  [Host] So where does SpaceX actually fit into that picture?
• 1:19
  [Guest] SpaceX's own IPO filing shows the two companies signed a framework for Terafab, their planned giant chip plant with Intel. Fortune reports SpaceX already rents hundreds of thousands of GPUs to Anthropic for about a billion and a quarter dollars a month, plus more to Google. Cars, robots, rockets, chips, and the computers training the AI are becoming one supply chain.
• 1:41
  [Host] Does Wall Street actually want them merged?
• 1:43
  [Guest] Wedbush analyst Dan Ives puts the odds of a combination above 80 percent by next year. From a shareholder's seat it's tidy: one company, one Musk, no fighting over which entity gets the chips first.
• 1:56
  [Host] Tesla shareholders have seen this movie, though. The last time Musk folded one of his companies into Tesla, SolarCity back in 2016, they sued and called it a bailout. Why would this one go smoother?
• 2:09
  [Guest] He won, but it took six years in Delaware court, because he'd sat on both boards. That history is why he punted to the general counsel this week: lawyers have to build a clean process before he can even say the word merger out loud.
• 2:25
  [Host] Here's what I can't square. Musk keeps telling conferences, with 80 percent confidence of his own, that AI and robots will deliver universal high income, that nobody will need money. Why assemble a single trillion-dollar company that charges for all of it?
• 2:40
  [Guest] That's the collision. A public company can't let its product drift toward free, because free has no margin. So you meter it, tier it, moat it, not out of villainy, but because that's what management owes the stock. Once abundance answers to shareholders, somebody's job is keeping it priced.
• 2:58
  [Host] Where do regular people even show up in this story?
• 3:01
  [Guest] Quietly, on the cap table. If your retirement account holds an S and P 500 index fund, you own a slice of Tesla, so these machines getting cheap for everyone would read as a raid on your own 401k. You'd get the dividend, but you don't get a vote on the roadmap.
• 3:20
  [Host] Patrick Deglon has a name for that default ending in his book Unscarcity: the Star Wars path, where the billionaires who own the AI companies become the new aristocracy, more powerful than any feudal lord because their serfs aren't even needed for labor.
• 3:36
  [Guest] And this week the lord of the manor told his earnings call the estates might be merging, then handed the question to his lawyers. For more on who ends up owning the machines of abundance, head to unscarcity dot ai. The book is on Amazon, the audiobook is on Spotify. This has been Minds, Bodies, and Terawatts.