In brief: It appears that Elon Musk's corporate empire could be heading for another major reshuffle. Tesla and SpaceX have formed special committees to explore a merger, confirming months of speculation about a combination of his two biggest companies. Musk likes the idea, though he cautions that investors shouldn't treat it as a done deal.

Speaking during SpaceX's third-quarter earnings call on October 20, Musk said independent directors are examining a potential agreement. He's staying out of their discussions because his position at both firms creates a conflict of interest. The committees have yet to agree on terms.

"I do think there's a lot of merit to combining the companies," Musk said.

The proposed combination would bring Tesla's electric vehicles, energy business and robotics efforts together with SpaceX's rockets, satellite internet and AI operations. Bloomberg reports that it would rank as the largest corporate merger ever. Musk pointed to cooperation on superintelligence software as a reason to bring the businesses together.

Any proposal would need shareholder support, and Musk acknowledged that the process might not produce a deal.

"Some people out there assume that a SpaceX and Tesla merger is a certainty," he said. "I think that would be overstating it."

In February, SpaceX absorbed xAI, bringing Musk's AI business into the rocket and satellite company. That merger was tied to his ambition to put AI data centers in orbit, enabling the combination of launch capacity, communications infrastructure and AI development within one organization.

Tesla and SpaceX have also been working on the Terafab advanced chipmaking project.

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