Tesla-SpaceX merger is a matter of time; success depends on Tesla shareholders modeling SpaceX's value to support the vote.

Your team says the Tesla and SpaceX merger could be announced this year. I agree. This year? I'm currently recording it at the end of September. Of course it's possible, but there's not much time left.

But at some point, it will definitely be proposed to investors. In my opinion, it's just a matter of time.

However, as I have said and will continue to say, the biggest obstacle to this actually happening is whether Tesla's current shareholders, who will have the power to vote on this proposal, have given themselves enough time to deeply understand SpaceX's potential.

The more Tesla investors try to value SpaceX, the more they will strongly support a quick merger with SpaceX. In other words, the number of Tesla investors who would theoretically or in principle support a merger will increase over time, as many of them will strive to model SpaceX.

But that's the obstacle. If a Tesla investor knows a lot about Tesla but nothing about SpaceX, someone who has spent time modeling Tesla but not the same amount of time modeling SpaceX, they will miss the huge opportunity in the short, medium, and long term.

Elon and Tesla are not stupid. They will likely only propose a merger if they believe the chances of shareholder approval are relatively high. So, for this to happen they would have to be reasonably confident that a sufficient percentage of Tesla shareholders know enough about SpaceX's potential and understand how amazingly good a deal this is going to be for Tesla shareholders, even if SpaceX takes a majority stake in the final transaction rather than 50/50.

Again, if you want to see the exact ratios, my 20-year Tesla and SpaceX valuation model has a whole sheet for this merger scenario, showing how much each company is worth in the transaction as a percentage.

I do n't think SpaceX AI or Tesla should reach any specific valuation, at least not directly. And that alone should be enough to send a signal to many Tesla investors that, "Wait a minute.

They just added half of Tesla's annual revenue in one quarter to the AI compute business.

For comparison, Tesla's current revenue is about $100 billion. This AI compute business could become bigger than Tesla's autonomous vehicle business and global cybercab business, although that would itself be a huge revenue and profit growth driver for Tesla.

If enough Tesla investors understand this, then They will support this initiative. As I said a few months ago, find a Tesla investor who is against a merger in principle, and I'll say, "Show me a valuation model," and they'll say, "Look at my Tesla model."

I'll say, no, no, no, show me your SpaceX model. And they'll say, I do n't have one. I'll say, I know. They'll ask, how did you know? I'll say, because you're against a merger in principle.

If you had spent time modeling SpaceX, you would have taken advantage.

Yeah, Tesla and SpaceX and We believe they will come together. Those are the two largest holdings in my stock portfolio, in fact, I only have Tesla and SpaceX in my portfolio. There's nothing else but those two companies.

Speaking of my own interests, you have no idea how complicated it has made my life to have two stocks instead of one. So to be clear, I'm looking forward to these two companies coming together.

Right now, getting enough support from Tesla shareholders to bring these two together will be a tough challenge, but it's only a matter of time. As time goes on, as more AI compute deals are announced, as the AI model becomes more successful, as Starlink's users grow, as the SpaceX AI business can demonstrate near-term, medium- and long-term revenue and profit growth, Tesla investors will understand the huge opportunity SpaceX AI has and will be in favor of the merger in principle.

From Elon Musk's perspective, whenever it comes up, he's going to want to make sure that there's strong enough support from Tesla shareholders that a potential merger between the two does n't just depend on a few votes.

It has nothing to do with the valuation of Tesla or SpaceX. It has everything to do with the number of Tesla investors.

My guess, and this is just a guess, is that SpaceX will probably have to perform great for at least a few more quarters (explosive growth, especially in the AI compute infrastructure business, such as monetization, leasing, and AI models) for enough Tesla investors to realize the huge potential for SpaceX in the near, medium, and long term and support a potential merger in principle.

Whether the market values SpaceX at a certain amount at that point is probably not very relevant. The market will not vote on a potential merger. That will be done by Tesla shareholders.