Investors are cheering the prospect of a SpaceX-Tesla megamerger.

Shares in the rocket company soared around 9% at market open in New York on Wednesday after Elon Musk said that SpaceX and Tesla have begun to discuss the mechanics of a potential combination.

Speaking on SpaceX’s earnings call on Tuesday night, Musk said that his two public companies have formed special committees of independent directors to explore a tie-up.

The billionaire, who is CEO of SpaceX and Tesla, said that he had recused himself from both committees, adding that talking about the much-rumored merger was like “tap dancing through a minefield.”

SpaceX is valued at about $2 trillion, while Tesla has a market capitalization of $1.5 trillion.

Musk also cautioned that a merger would depend on both companies agreeing on the terms of the transaction and securing shareholder approval, making it far from a done deal.

However, the world’s richest man said he thought merging Tesla and SpaceX would be a good idea, allowing greater cooperation on AI, robotics, and chipmaking.

“I do think there’s a lot of merit to combining the companies as we are pretty much in the Super Intelligence singularity,” said Musk.

It came as SpaceX reported that quarterly revenue had more than doubled year-over-year, with the strong performance of its compute leasing business outweighing high spending on new AI infrastructure.

Tesla shares also opened up more than 2% on Wednesday.

Rumors about a tie-up between Tesla and SpaceX have been swirling for months, fuelled by regular hints from Musk and other SpaceX executives.

The two companies are already regular collaborators — most recently on Tesla’s flying Roadster supercar, which includes thrusters built by SpaceX.

A merger would create a megacorporation spanning everything from rocket launches to social media to EVs, but it would be an enormously complicated deal to complete.

Combining with SpaceX, which has contracts with the US military, would put Tesla’s lucrative China business in a difficult position.

The Wall Street Journal reported in July that Tesla executives discussed spinning off or selling the company’s Chinese operations, something Musk denied as “fake news.”

Any merger with SpaceX would also require approval from at least 50% of Tesla’s shareholders, which Musk acknowledged on SpaceX’s earnings call would be a “high hurdle.”