Inside the $55 Billion Terafab Plant Tying Musk's Companies Together

Kind: captions Language: en Good morning, this is Dylan Jovineal with Behind the Markets, happy Friday. Today is Friday, July 3rd. TGIF and it is America's birthday tomorrow, July 4th. I'm very, very excited. I am so excited that instead of teaching my kids Western history by going to Europe this summer, we're going to be driving across the country. I want to show them how beautiful this great, great country is all across Pacific Northwest, Midwest, down across I'm going to show them things, this beautiful, bountiful, wonderful country that we live in. I'm so grateful to be an American and I want to pass that on to my kids. Anyway, today I'm going to leave you off with something for your holiday weekend. I'm going to answer a question that I thought would have been funny 6 months ago probably, but one of the questions I've been asked two dozen times in the past month or so is, do I think Tesla and SpaceX will actually merge? And I might have thought that was funny 6 months ago, but look, the stock is starting to trade like it. If I look back, there's a lot of synchronized stock movements. You know, SpaceX goes up, Tesla goes up, SpaceX goes down, Tesla seems to go down. SpaceX's shares one day rose by 4.1% Tesla's stock rose. Now, they're in similar businesses obviously, you know, and that's another thing which I'll talk about in a second. They are in very, very similar businesses in a way cuz Tesla really isn't, you know, a car company anymore, it's a robot company. I mean, yeah. Auto taxis, those are robo taxis, those are cars that are robots that drive people. And they're of course moving into Optimus. So basically, you're starting to see the stocks trade like two stars and this is the way I always look at it. When two companies look like they're going to merge, they start to rotate around each other like two stars in space, you know what I mean? And they just grab each other's gravity basically or maybe like a planet and a star, SpaceX being the bigger one here, I guess. Technically, but they're both, you know, similarly. And you know what? If you actually look underneath the hood at Tesla's org chart, and especially this $55 billion Terafab semiconductor plant that we've talked about quite a bit here, and you look at this, you could see both of these companies are sharing They're already operating as one entity in some very significant ways. I mean, look. Now, Terafab it is the semiconductor factory, basically the place where Tesla and SpaceX are going to secure They're trying to secure the actual materials they need to compete in this race, including autonomous vehicles, humanoid robots, and data centers. Really is interesting cuz it combines a lot of their expertise in developing complex hardware systems, and frankly, large-scale manufacturing facilities. Certainly, when you think about Tesla, I mean, they're really, really good at that. Tesla has a lot of experience building large-scale manufacturing experience. SpaceX has a lot of experience developing complex hardware systems. In a way, you know, perfect if you want to be in the robot-making business, you know? So, when you look at it, obviously Musk has responsibilities at both companies, but other people like Charlie Kuman, he's held leadership roles in material engineering across both companies for a decade, and you have a bunch of senior executives that have taken roles not just with Tesla, but with the AI unit within SpaceX, XAI, Grok, or whatever it is. So, you know, look, Musk's companies This is not saying a merger is happening. I'm not saying that. What I'm saying is that Musk's companies have collaborated for years. So, they've worked together like on the next-generation Roadster, and which actually incorporates SpaceX technology. So, there's no certainty that that is going to happen at all, but the stocks are trading in sync. So, the question is they seem to be a gravity pulling each other towards each other. They're rotating around each other a bit. There's a lot of correlation between them. So, the argument for them merging has never looked so serious, whereas 6 months ago it might have been laughable. Anyway, it could happen. I mean, you know, my goodness, it could really really happen. And if you look at these companies as hardware robot companies, I mean, I get it, you know, cuz basically a self-driving car at Tesla, I mean, he's got the self-driving rockets at SpaceX. But basically at root, the nature it's Marcus Aurelius. What is the nature of the thing? The nature of the thing is to move things autonomously. Moving things, moving people autonomously, whether it's moving people on the road, whether it's moving people into space, you're moving things. Programming is moving these things. And in that sense, they do the same thing in that way, really. They do the same thing. The challenge is they have very different economic characteristics, both companies. SpaceX, as is, has a dominant market position, where Tesla has the opposite of a dominant market position, faces stiff competition, not only from American companies and Japanese companies, but they let Chinese EVs come in here to play. These boys up there, they know how to make EVs at scale, and they don't got to worry about losing money because the government is just funding it, so they grab share from foreign manufacturers, really blow out the strategy. Really, really amazing. Anyway, that's all I have for you this holiday weekend. Have a wonderful holiday weekend. Have a wonderful July 4th celebration. God bless you and God bless America.