Texas AG-elect vows scrutiny of any SpaceX-Tesla merger

By Nathan Brooks

A potential combination of Space Exploration Technologies Corp. and Tesla Inc. would be the biggest-ever deal, and Texas Attorney General-elect Nathan Johnson says: “Any merger of companies of that consequence warrants tremendous scrutiny.”

Bloomberg reported this week that merger talks between the two companies are progressing. Bloomberg described them as Texas’s two most valuable; the combined entity would hold electric vehicles, energy storage batteries, rockets and satellites.

Johnson declined to discuss any deal’s specifics. His intervention therefore remains a warning, not a filed challenge or announced review.

What will scrutiny look like?

Johnson spoke at Bloomberg’s Dallas office on Thursday, nine days after he and fellow Texas Democrats swept to power. Bloomberg noted that Republicans have controlled Texas since the 1990s, and reported that Governor-elect Gina Hinojosa and US Senator-elect James Talarico have vowed to check Musk’s power.

Johnson said neither he nor his transition team has been in touch with Musk, adding: “if Elon wants to talk, we can talk.” SpaceX and Tesla did not immediately respond to requests for comment.

Bloomberg describes Musk as the world’s richest person and says much of his empire is concentrated in Texas. Musk sought a more business-friendly regulatory environment under the state’s Republican leadership, and Bloomberg reports that he spent hundreds of millions of dollars supporting the GOP in Texas and across the US in the midterm elections.

Johnson tied political deference to that spending: “I think he’s received a great deal of deference due to his alignment with the Republican Party and the tons of money he spent for the Republican Party,” he said. “I have no qualms about examining his relationships to the state.”

His stated concern is concentration across public policy and private enterprise. “I don’t want anybody to have such control of the public sector that they can bend public power to their private gain,” Johnson said of Musk. “I think his empire is at great risk of crossing that line.”

What changes in January?

Johnson takes office as Texas attorney general in January. He has promised to refocus the office on the “nuts and bolts” of areas such as consumer protection and antitrust litigation, while moving it away from the culture-war issues championed by outgoing Attorney General Ken Paxton.

He also plans to retain several Paxton-era lawyers specializing in antitrust and consumer protection. Johnson praised Paxton as a “national leader” in both areas; the personnel plan signals continuity in specialist enforcement even as the office’s broader priorities change.

What changes in federal-government litigation?

Bloomberg described Paxton, who was trounced by Talarico in the state’s US Senate race, as a Republican hero after filing more than 100 lawsuits against the federal government during the Biden administration. Johnson said he would rather devote his office’s resources to pursuits other than suing the Trump administration, though he would not shrink from a necessary fight.

“My goal is not to sue them all the time,” Johnson said. “I don’t really think anybody should be bragging about how many times they sue the president. But I do have a job to do, and if the president is causing us harm, I’m going to sue him.”

That approach would reduce the office’s default focus on the administration without ruling out a lawsuit. It would leave Johnson room to pursue cases he considers necessary.

Where does the coal case stand?

One antitrust case Paxton has prioritized accuses BlackRock Inc. and State Street Corp. of colluding to reduce coal output. Johnson said he has yet to make any determinations about whether to continue pursuing the case.

“I’m in a position now of not just shooting my mouth off — I’m in a position of power,” Johnson said. “I intend to be very disciplined in examining that case.”

What does this change for companies and investors?

For SpaceX and Tesla, the immediate change is heightened attention from the state’s incoming attorney general, not an announced legal obstacle. Johnson declined to discuss terms, has not contacted Musk and has disclosed no formal process. Merger talks, however, continue to progress, according to Bloomberg.

For investors, the distinction is material: promised scrutiny is a risk to assess, while a legal challenge is not yet a fact. The proposed scale brings consumer protection, antitrust and political influence into one regulatory question.

Deal teams now have a named official to watch when Johnson takes office in January. They do not yet have a defined merger review, a stated legal theory or a company response; SpaceX and Tesla had not immediately commented.

Johnson’s first moves will determine whether scrutiny becomes a broader enforcement agenda or remains a warning. A formal merger inquiry, staffing choices and the coal case would give deal watchers the clearest signals. For a potential biggest-ever merger, that distinction will shape regulatory risk from the outset.