SpaceX and Tesla form independent committees to review possible merger

Independent committees are now reviewing a merger

The boards of SpaceX and Tesla have each formed special committees of independent directors to evaluate a possible merger, Elon Musk said during SpaceX's third-quarter earnings call on Tuesday. According to TechCrunch, Musk said the committees were created at the request of shareholders, and that they have not yet agreed on the terms of any transaction.

Musk, who leads both companies and is the largest individual shareholder of each, is not part of either committee. Describing himself as a conflicted party, he said he cannot join the discussions, likening the process to "an odd kabuki dance where two groups of people are talking, and I can't be in the conversation."

He did not name the committee members, and he pushed back on the idea that a deal is a foregone conclusion. "At the end of the day, the shareholders have to be supportive of this," Musk said, according to The Verge, while adding that he personally thinks combining the companies is a good idea.

Who counts as independent

Although Musk did not identify the committees, the pool of eligible directors is small and documented.

Per TechCrunch, Tesla's October 19 proxy filing shows seven independent directors under Nasdaq's listing standards: board chair Robyn Denholm, Ira Ehrenpreis, former Tesla CTO JB Straupbel, Joe Gebbia, Jack Hartung, James Murdoch and Kathleen Wilson-Thompson. Musk and his brother Kimbal Musk do not qualify as independent.

SpaceX lists six independent directors, TechCrunch reports: Ehrenpreis, who also chairs SpaceX's compensation and nominating committee and appears on both companies' independent rosters, along with Randy Glein, Donald Harrison, Steve Jurvetson, Luke Nosek and Roelef Boutha. Musk, SpaceX president and COO Gwynne Shotwell and Antonio Garcias sit on the board without independent status. Garcias, a former Tesla director, founded Valor Equity Partners, which holds a 3.4% stake in SpaceX and financed its AI hardware purchases through leaseback arrangements.

The vote is the hard part

Musk cast shareholder approval as the decisive obstacle, and the math differs sharply between the two companies. TechCrunch reports that since SpaceX's IPO, Musk holds more than 50% of its voting power, which would make shareholder support there relatively easy to secure. Tesla is the opposite: approval would require a 50% vote of all shares outstanding, not just those that cast ballots, a threshold Musk called quite a high hurdle, according to The Verge.

Strategic logic and deal structure

Musk argued the companies are converging anyway, saying there is a lot of merit to combining them "as we are pretty much in the superintelligence singularity." He pointed to joint work on AI software, robotics, chip design, Terafab (the shared chip manufacturing project) and Starmind, SpaceX's orbital AI data center effort.

The Verge reports that a combined company would be valued upwards of $3.6 trillion, but that the direction of the deal matters a great deal. If Tesla absorbed SpaceX, it would have to issue millions of new shares, diluting existing Tesla owners, while SpaceX's launch program, which The Verge says requires tens of billions of dollars a year, could divert cash from Tesla's factories and battery plants. Most Wall Street analysts and legal experts expect the reverse: SpaceX acquiring Tesla, or absorbing it through a stock swap, since SpaceX has carried the higher valuation since its IPO. That structure would hand SpaceX shareholders majority control of the combined entity, which The Verge notes some Tesla investors may resist.

Timing speculation is already circulating. The Verge reports that Barclays published a client note earlier this month suggesting a combination could be announced ahead of Tesla's annual shareholder meeting on December 3, 2026.

Why it matters

A SpaceX-Tesla merger would fuse an automaker and energy company with a launch provider, AI developer and chip manufacturer, creating a single mega-corporation spanning most of Musk's portfolio — an unusually broad bet that AI, robotics and space infrastructure belong under one roof. The governance setup is equally significant: with Musk recused, independent directors must negotiate between two companies in which the same person is the largest shareholder. Tesla investors have already shown willingness to back Musk-linked proposals, having approved his pay package last year even after a Delaware judge rejected it over independence concerns, as The Verge notes. Whether that goodwill survives a vote requiring half of all outstanding Tesla shares, and whether the committees can agree on terms at all, will decide whether these talks turn into a deal.