Elon Musk said it would be a "good idea" to merge Tesla and SpaceX, according to Bloomberg.
The proposal remains exploratory, with no terms or commitment in place, and Musk has said there is "no guarantee" a deal happens.
Tesla and SpaceX have each formed special committees of independent directors to examine a possible combination, and Musk, who leads both companies, has said he is a conflicted party and cannot take part in those discussions, according to Fortune.
Musk pointed to potential gains from combining AI software, chip design, robotics and connectivity, including the jointly planned Terafab chip-manufacturing facility, as a case for the merger.
At current valuations, SpaceX is worth about $2 trillion and Tesla nearly $1.5 trillion, implying a combined company worth roughly $3.5 trillion, which would rank among the largest corporate mergers ever.
Any transaction would face a high bar: Musk has said Tesla would need approval from 50% of all shares outstanding, not just a majority of votes cast, with SpaceX stakeholders also required to sign off.
SpaceX, which operates the Falcon rockets, Dragon spacecraft and the Starlink satellite network, has recently expanded into AI-related infrastructure and merged with xAI, developments platform records say have fuelled speculation about a broader consolidation of Musk's ventures.
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