ARK Invest CEO Cathie Wood says Elon Musk is navigating geopolitical complexity at the highest levels to advance a potential Tesla-SpaceX merger.
Shares of Tesla (NASDAQ: TSLA) closed 0.6% higher at $354.81 on Wednesday, while SpaceX (NYSE: SPCX) gained 1.1% to end at $150.86.
Wood discussed the potential merger with early SpaceX investor and Xprize Foundation Executive Chairman Peter Diamandis in a recent interview, conducted amid the Trump-Xi summit in Washington.
She predicted that the two companies would merge and agreed that a deal announcement was possible before the end of the year.
“You know, it’s very interesting to see him sitting at the table with President Trump and Xi Jinping. And we know that Maye Musk is adored in China, so he’s working all angles here,” Wood said.
Wood also pointed to the possibility of Tesla developing a robotaxi operation in China, saying, “And there’s even been talk that he’s going to be able to develop a robotaxi system in China. So it’s very interesting.”
She acknowledged that China represented the most significant structural obstacle to any merger, given SpaceX’s deep involvement in U.S. national-security contracts and the current administration’s posture toward Beijing.
“Many people would say that’s the biggest stumbling block, given our defense posture and given how this administration has basically portrayed the Chinese as our biggest potential enemy,” she said, adding, “Keep your enemies close is what I think this week is all about.”
ARK continued buying both stocks on Tuesday, purchasing 48,352 Tesla shares through ARK Innovation ETF and 9,112 SpaceX shares worth approximately $1.3 million, as part of $149 million in total purchases that session.
SpaceX’s IPO prospectus disclosed that U.S. government sales accounted for 20.9% of 2025 revenue, including business serving national-security customers through its Starshield program, and the company is subject to export controls.
Tesla’s Shanghai facility is a major manufacturing and export hub, responsible for more than half of Tesla’s global deliveries in recent periods, with China accounting for roughly a fifth of total company sales.
The Wall Street Journal reported in July that some executives had been told to prepare for a possible separation of Tesla’s China business, potentially through a spinoff, sale, or wind-down, to prevent Shanghai operations from falling under a U.S. defense contractor following a merger.
Musk flatly rejected the report, stating, “This has never even come up in a discussion ever. Absurdly fake news.”
ARK analysts Brett Winton, Sam Korus, and Nick Grous subsequently addressed the issue on the firm’s August Brainstorm podcast, calling China a “small-ish wrinkle” and arguing that both shareholder groups could be “net better off” if the companies combined.
Morgan Stanley has noted that Tesla and SpaceX “share tech, talent, and infrastructure,” while JPMorgan flagged China as the practical bottleneck and Stifel identified timing as the central question for investors expecting a deal.
The two companies signed a Terafab semiconductor framework in March, with Intel joining in April and SpaceX disclosing the collaboration in its IPO filing, further underscoring the growing technical overlap between the two firms.
On Stocktwits, retail sentiment for TSLA was rated “neutral” amid “normal” message volume, while SPCX sentiment was “bullish” amid “high” message volume, reflecting divided views on the merger’s likelihood and structure.
While TSLA stock has declined 21% year-to-date, SPCX has fallen 6% over the same period, leaving investors weighing which position offers stronger upside if a deal materializes.
