SpaceX plans to buy residences of neighbors affected by the noise from its data centers

The proposed merger between Elon Musk's companies, Tesla and SpaceX, is encountering complexities related to deal valuation, control of the combined entity, and regulatory requirements from both the United States and China. Although the combination could boost investment in artificial intelligence, the execution of the operation hinges on negotiations and shareholder approval.

Wall Street views this combination as a highly probable scenario, yet the path to an agreement involves conflicting interests. Tesla's industrial presence in China is particularly sensitive, given that SpaceX holds contracts related to American defense.

Tesla, valued at approximately $1.5 trillion (7.54 trillion Brazilian reais), may need to offer a premium for its shareholders to agree to exchange their shares for SpaceX stock. Analysts from RBC Capital Markets and JPMorgan suggest this premium could range from 20% to 35%, while other investors do not anticipate a significant premium, especially since some already hold shares in both companies.

The merger would allow for shared services and potentially increase funding opportunities for expensive projects. The companies are jointly developing the Terafab chip factory, and AI already accounts for over half of SpaceX's revenue. Expansion requires substantial investment, and the possibility of joint borrowing is seen as an advantage of this operation.

Nevertheless, not all projects underpinning the companies' valuations have reached commercial scale. Orbital data centers, robotaxis, and humanoid robots are still in the development phase and require further investment.

Currently, Musk controls about 85% of SpaceX votes through super-voting shares, compared to roughly 20% in Tesla. According to Reuters, he could concentrate around 57% of the votes in the combined company.

Another obstacle is the approval of Tesla shareholders. Musk has stated that the agreement must receive a majority of all shares, not just a majority of registered votes. In fact, uncounted shares could complicate the approval process.

There are also concerns regarding the governance of the operation, in which Musk would be involved on both sides of the negotiation. When Tesla acquired SolarCity in 2016, a Delaware court ruled that an independent committee should have been formed.

Tesla relies on China for vehicle production, while SpaceX develops military and intelligence systems for the US government. The merger could raise national security concerns in both countries, particularly regarding access to confidential data and technology. Beijing requires that data collected by Tesla's autonomous driving systems remain within China. One possible solution is to keep local operations separate, with barriers preventing information exchange with SpaceX.

China might leverage the negotiations to secure commitments regarding investments, production capacity, or access to strategic technologies. However, these demands could conflict with US restrictions concerning defense.

Among the alternatives discussed by analysts, none is definitive. The Shanghai factory accounts for over 50% of Tesla's global production, according to Yale Zhang, CEO of the consulting firm AutoForesight. The Chinese operation also generates part of the cash used to fund the manufacturer's future projects.

For Musk, the challenge will be reconciling shareholder demands with the constraints imposed by Washington and Beijing. Even if both companies share common technological goals, this does not guarantee the approval of the merger or the satisfaction of all parties' conditions.

SpaceX aims to capture the Starship spacecraft and its Super Heavy booster for the first time during an upcoming test flight scheduled for November. The purpose of this operation is to recover both sections of the space vehicle using the mechanical arms of the launch tower. If successful, this action will represent the first complete recovery of an orbital launch vehicle in history.

Elon Musk, the company's CEO, disclosed this plan during the third-quarter financial results presentation on Tuesday (20). He stated that the subsequent mission will be the fifteenth full-scale flight attempt of Starship, declaring that if successful, it would be unprecedented to have a fully recovered orbital launch vehicle, classifying the feat as a civilizational technological milestone.

Although the executive acknowledged that there is no guarantee of success, he expressed confidence that the attempt has a higher chance of succeeding than failing. If the operation does not proceed as planned, SpaceX will continue testing until the end of the year and plans to increase the frequency of flights in 2027.

How does the Starship capture attempt work?

Starship operates as a launch system composed of two stages: the Super Heavy booster, which executes the first phase of ascent, and the Starship itself, which corresponds to the second stage. Together, they form a vehicle with approximate dimensions of 120 meters in height and nine meters in diameter.

The system uses Raptor engines, which utilize liquid methane and liquid oxygen as fuel. Since its conception in 2018, Starship has been designed to return to the launch site and be reused.

To enable this capture, SpaceX has developed towers equipped with mechanical arms, nicknamed 'hashis' (the English word for hashis). This structure has the capacity to hold the vehicle during its return, eliminating the need for a traditional ocean rescue.

This strategy is crucial because the reuse of both parts would allow the company to recover components of an entire orbital system, in contrast to the total loss of equipment with each launch. The long-term goal is to make launches more frequent and expand cargo transport capacity into space.

Regarding previous attempts, the September 28 mission marked the 14th test flight of Starship, reaching Earth orbit for the first time and introducing the transport of an operational payload consisting of 26 third-generation Starlink satellites (V3).

However, this flight faced difficulties. One of the Raptor engines on the booster prematurely shut down during ascent, forcing the mission control team to adjust the protocol to proceed with the launch. Furthermore, the mission ended earlier than expected; the initial plan was for about ten hours of duration and six Earth orbits, but the flight ceased after approximately three hours and two orbits.

Upon completion, Super Heavy fell into the Gulf of Mexico, while the Starship performed a burn to leave orbit and returned to the atmosphere, ending in a vertical landing in the Pacific Ocean, north of Hawaii. Neither component was recovered on that occasion, demonstrating that although Starship can reach orbit and carry satellites, the complete recovery of the system still represents a significant challenge.

SpaceX wants to accelerate tests

Musk confirmed that the company will continue attempts if the capture is not successful in the next flight. There is an expectation that the pace of testing will be increased throughout 2027.

The recovery of the two components is an essential phase in SpaceX's projects aimed at establishing a completely reusable orbital system. This technology is also intrinsically linked to the ambition of transporting large volumes of cargo into space and, in the future, supporting extraterrestrial exploration missions.

Currently, the simultaneous capture of the spacecraft and the booster remains a testing target, and the outcome of the next mission will determine whether the company is ready to advance in this phase of Starship reusability.