STARBASE, Texas: Tesla and SpaceX have formed special committees to discuss a potential merger, marking the first official confirmation that Elon Musk's two companies are formally considering a combination.

Musk said merging the companies would be "a good idea," but cautioned that no transaction terms had been agreed and a deal might never happen.

"I think it would be a good idea, but it's really up to the special committees of both companies," Musk told investors on a conference call. "Because I'm a conflicted party, I can't actually be in the discussions of the special committees," which comprised independent directors.

Musk said the committees were formed at the request of shareholders, who would ultimately need to approve a deal.

"I do think there's a lot of merit to combining the companies as we are pretty much in the superintelligence singularity, and there's a lot to be gained from cooperating on developing superintelligence software, chip design, the Terafab obviously, robotics, mass-to-orbit with the Starlink constellation, connectivity," he said.

The talks began in recent weeks and could result in SpaceX acquiring Tesla, a person familiar with the matter told Reuters. The person declined to be named because they were not authorized to speak to the media. Tesla has been working with an investment bank to advise on the discussions, the person said.

Musk owns nearly a fifth of Tesla and just under half of SpaceX. He said it would be premature to assume a merger would happen because the special committees had not agreed on transaction terms and might never do so.

SpaceX shares rose 8 percent in extended trading after Musk's comments, while Tesla gained 1.8 percent.

The potential combination comes as SpaceX's rapidly expanding AI operations reshape its business. Revenue climbed 161 percent to US$14.58 billion in the three months ended September 30, up from $6.53 billion a year earlier, while AI revenue increased almost tenfold to $7.56 billion.

The AI revenue came mostly from renting data-center capacity to developers, including Anthropic, Alphabet's Google, and Reflection AI, rather than from SpaceX's own models.

SpaceX reported net income of $4.4 billion for the quarter, compared with a $1.1 billion loss a year earlier and analysts' expectation for a $1.57 billion profit. It was the company's first profit as a public company.

Capital expenditure nearly tripled to $19.6 billion as SpaceX invested heavily in computing infrastructure. Chief Financial Officer Bret Johnsen said the company expects to spend another $35 billion to $40 billion on capital in the fourth quarter.

Terafab, the chip-manufacturing joint venture between Tesla and SpaceX, should produce its first test chip around May or June next year and aims to reach volume production by the third quarter of 2028, Musk said.

Starlink, SpaceX's satellite-internet business, reached 13.6 million subscribers in the third quarter, exceeding analysts' forecast of 12.19 million.