SpaceX and Tesla boards form special committees to weigh a merger

SpaceX and Tesla have each formed special committees of independent directors to review a possible merger between the two companies, Elon Musk confirmed on SpaceX's third-quarter earnings call this week. Musk, who serves as CEO of both firms and is the largest individual shareholder in each, said he is recused from the committees' discussions because of his obvious conflict of interest.

The move follows months of shareholder speculation about combining SpaceX, now valued in the hundreds of billions of dollars after its recent IPO, with publicly traded Tesla. Musk told investors the committees were formed “at shareholders' request” and described the process as an arm's-length negotiation between two independent groups rather than a done deal. “This isn't guaranteed to happen,” he said, adding that any transaction would still need broad shareholder approval.

Tesla disclosed the identities of its seven independent directors in an October 19 proxy filing with the SEC: board chair Robyn Denholm, committee chair Ira Ehrenpreis, JB Straubel, Joe Gebbia, Jack Hartung, James Murdoch, and Kathleen Wilson-Thompson. SpaceX's investor relations page lists six independent directors, including Ehrenpreis, Randy Glein, Donald Harrison, Steve Jurvetson, Luke Nosek, and Roelof Botha. Musk, his brother Kimbal Musk, Valor Equity Partners founder Antonio Gracias, and SpaceX president Gwynne Shotwell are excluded from the independent panels.

Musk argued that merging the companies would accelerate cooperation across several joint projects already underway, including Starmind, SpaceX's orbital AI data center initiative, and Terafab, a chip-manufacturing partnership between the two companies. He said a combined entity could move faster on shared AI and robotics software than two separately governed companies negotiating licensing deals with each other.

The mechanics of any merger would differ sharply between the two companies. SpaceX's recent IPO structure gives Musk more than 50% of voting power, making shareholder approval there comparatively straightforward. Tesla is a different story: Musk said any deal would require approval from a majority of all outstanding shares, not just those cast at a shareholder meeting — a higher bar that has complicated other Musk-driven Tesla proposals, including his 2026 pay package.

A merger would also draw scrutiny over related-party dealings. Valor Equity Partners, led by Tesla and SpaceX board member Antonio Gracias, holds a 3.4% stake in SpaceX and has financed SpaceX AI-hardware purchases through leaseback arrangements — the kind of overlapping financial relationships that proxy advisors and regulators tend to flag in any transaction between Musk-controlled entities.

Neither company has given a timeline for when the committees might report back or whether formal merger terms will be proposed. As first reported by TechCrunch, the special committees have not yet agreed on any deal structure.