Space Exploration Technologies Corp. (NASDAQ:SPCX) and Tesla Inc. (NASDAQ:TSLA) are tightening a web of shared infrastructure and technology as the Elon Musk-led companies push into “physical AI,” a dynamic Morgan Stanley believes could lead to a potential merger.

Deepening Web Of Shared Infrastructure

Analysts at the bank led by Adam Jonas said the companies “share tech, talent, and infrastructure in a shared mission of converting energy to intelligence,” according to an Investing.com report.

As large language models approach potential performance limits, the firm expects investor attention to shift toward physical AI, arguing the two companies may be “uniquely capable of addressing” that opportunity, “separately or, more likely, jointly.”

The analysts counted 71 mentions of “Tesla” in SpaceX’s S-1 filing, with 34% referencing direct collaboration and 41% tied to governance and related-party transactions.

Compute And Connectivity Flow Both Ways

The two companies are jointly building Terafab, a Texas chip factory with Intel Corp. (NASDAQ:INTC) costing over $119 billion, and co-developing an AI platform called Macrohard.

SpaceX bought $506 million worth of Tesla Megapacks and $131 million worth of Cybertrucks in 2025 for its Colossus compute cluster. The rocket maker’s quarterly filing showed Megapack purchases totaled $329 million in the first half of this year.

SpaceX supplies Tesla compute, set to reach 4.9 gigawatts by 2027, and Starlink connectivity starting with Cybercab.

Tesla, in turn, provides SpaceX with data-collecting robots, energy storage tech and manufacturing expertise from a workforce over six times SpaceX’s size, Morgan Stanley noted.

Musk Has Fueled Merger Talk

Musk has repeatedly stoked speculation about a future Tesla-SpaceX merger, telling the All In Podcast with SpaceX President Gwynne Shotwell this month that, given “all this collaboration on so many levels,” people should “imagine what action one might take when there’s so much close collaboration in so many areas.”

Investor Ross Gerber has said a merger could become a “must-have” for global investors, though he’s warned it would be dilutive for SpaceX shareholders and a poor deal for Tesla investors given the two companies’ current valuations.

SpaceX has a valuation of $2.06 trillion compared to Tesla’s ‪$1.48 trillion, according to TradingView.

Price Action: SpaceX’s shares closed 0.56% lower on Monday at $151.85 and climbed 0.58% in extended trading. Tesla closed 3.03% higher at $375.30 and fell 0.01% in after-hours trading.

Benzinga edge rankings indicate SpaceX’s stock has a positive price trend across the short, medium, and long term.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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