Elon Musk has spent years insisting that Tesla and SpaceX are separate companies with separate shareholders. On Tuesday, he said out loud that he would like them to be one. On SpaceX’s third quarter earnings call on October 20, Musk revealed that both companies have formed special committees of independent directors to study a merger, a deal that at current market prices would create a company worth roughly $3.5 trillion.
As UNILAD Tech reports, the combination would also reshape the fortune of a man who is already the richest person on the planet. Musk was careful to say nothing is agreed. “Do I think it would be a good idea? Yes, but at the end of the day, the shareholders have to be supportive of this, and particularly on the Tesla side, we will need a 50% vote of all shares, not just those who vote, but of all shareholders,” he said on the call.
That last clause is the part Wall Street should be reading twice. Here is what was actually said, how a deal like this would be built, and why the governance questions are at least as big as the dollar figures.
The short version
- Tesla and SpaceX have each formed special committees of independent directors to evaluate a merger. Musk says he is recused as a “conflicted party.”
- No terms are agreed. Tesla would need approval from a majority of all outstanding shares, not just votes cast.
- At current prices, SpaceX (about $2.1 trillion) plus Tesla (about $1.5 trillion) adds up to roughly $3.5 trillion.
- Barclays estimates Musk would own about 37% of a combined company and control about 56% of the vote.
- The 2016 SolarCity deal, which led to years of litigation, is the precedent everyone is citing.
What Musk actually said on the call
SpaceX, which trades on Nasdaq as SPCX after its record IPO in June, reported third quarter revenue of $14.6 billion, up 161% from a year earlier, and net income of $4.4 billion, according to CNBC. Its AI compute business, which SpaceX calls superintelligence and which absorbed xAI earlier this year, brought in $7.6 billion and is now its biggest revenue line. Starlink connectivity revenue grew 69% to $5.2 billion.
The merger news came later in the call. “I think both SpaceX and Tesla have formed special committees to discuss this idea at the request of shareholders, and these special committees consist of independent directors,” Musk said. He added, as quoted by Fortune, that “because I’m a conflicted party, I can’t actually be in the discussions of the special committees.” TechCrunch reported that he described the process as “an odd kabuki dance,” and CNBC said he compared talking about it to “tap dancing through a minefield.”
He also pushed back on the idea that a deal is done: calling a merger a certainty “would be overstating it,” he said, and the committees have not reached agreement on any terms. Investors did not wait for the fine print. SpaceX shares rose about 8% the next day, adding roughly $155 billion in market value, and Tesla gained 3.4%, according to Fortune. On Tesla’s own earnings call on October 21, Musk declined to add anything, saying he had said what should be said the day before.
Why Musk wants this: it is an AI story
Musk framed the logic in AI terms. “I do think there’s a lot of merit to combining the companies as we are pretty much in the superintelligence singularity, and there’s a lot to be gained from cooperating,” he said on the call. He listed chip design, the Terafab chip plant the two companies are planning in Texas, robotics, orbital data centers and connectivity as areas of overlap.
The pieces do fit together on paper. Tesla brings autonomy software, the Optimus humanoid robot, batteries and energy storage, and the robotaxi effort that is now under federal scrutiny in Austin (we covered the Cybercab launch and the NHTSA audit). SpaceX brings launch capacity, xAI’s Grok models and data centers, and Starlink, which is already pushing past home internet into phones with its plans to become a wireless carrier. A Reuters explainer noted that Starlink could provide links for robotaxis and Optimus robots, while Tesla’s energy business could help power SpaceX’s growing compute needs.
The two companies are already entangled. Tesla’s $2 billion investment in xAI, disclosed in January, was converted into about 19 million SpaceX shares when SpaceX absorbed xAI in February in an all-stock deal that valued the combined company at $1.25 trillion, according to Bloomberg and Electrek. That stake is under 1% of SpaceX.
How a Tesla and SpaceX merger would actually work
Nobody is going to write a $1.5 trillion check. A deal of this size would almost certainly be a stock swap: one company’s shareholders trade their shares for shares of the other (or of a new holding company) at a fixed exchange ratio. Reuters reported that both structures are on the table, with advisers already hired.
The exchange ratio is where the fight happens. RBC Capital Markets modeled an all-stock SpaceX acquisition of Tesla at $480 per Tesla share, roughly a 30% premium, which would value the combined company at about $3.74 trillion and leave SpaceX holders with 52% and Tesla holders with 48%, as Benzinga reported. Wedbush’s Dan Ives thinks Tesla holders would want $500 to $550 a share and sees the combined company near $5 trillion. Tesla closed at $386.47 on October 21.
Every dollar of premium paid to Tesla holders dilutes SpaceX holders, and vice versa. Electrek argues the only shareholder who cannot lose on the ratio is Musk, because he sits on both sides of it.
| Metric | Tesla | SpaceX |
|---|---|---|
| Ticker | TSLA (Nasdaq) | SPCX (Nasdaq, since June 12, 2026) |
| Market value (Oct 21) | About $1.5 trillion | About $2.1 trillion |
| Q3 2026 revenue | $28.05 billion | $14.6 billion (up 161%) |
| Musk economic stake | About 20% | About 45% to 48% |
| Musk voting power | About 20% | More than 82% |
| Merger approval | Majority of all shares | Effectively Musk’s call |
What it could mean for Musk’s fortune
UNILAD Tech’s headline number is that, assuming Musk holds a 33% stake, a merger could make him worth $1.55 trillion. Treat that figure carefully. A third of a $3.5 trillion company is about $1.16 trillion; you only get to $1.55 trillion if the combined company is valued around $4.7 trillion, closer to Ives’ bull case than to today’s prices.
Barclays analyst Dan Levy’s model is more specific: at current values, Musk would own about 37% of the combined company and control about 56% of the vote, according to TipRanks. At $3.5 trillion, 37% is roughly $1.3 trillion. For context, Bloomberg’s index put Musk back above $1 trillion on October 5, and Forbes’ real-time list, which handles his restricted Tesla shares differently, had him nearer $920 billion this month. Musk has also floated other ways of spreading SpaceX equity around, including his idea to hand a SpaceX share to every kid in America.
The bigger lever may be Tesla’s 2025 pay package. Shareholders approved it in November 2025 with more than 75% of votes cast, according to Al Jazeera. It pays out in 12 tranches tied to market value targets that climb to $8.5 trillion plus operational goals like robotaxis and Optimus. Electrek and a Wall Street Journal analysis cited by Gizmodo point to a change in control clause under which the operational goals fall away in a sale. By Electrek’s math, a deal valuing Tesla at $3 trillion could vest three tranches, about 105.9 million shares, without a single robotaxi milestone. Whether a merger counts as a change in control depends on how it is structured, so this is an open question, not a certainty.
The governance problem: Musk on both sides of the table
Special committees of independent directors are the standard tool when a controlling shareholder stands on both sides of a deal. They hire their own bankers and lawyers, negotiate price, and can say no. The problem is credibility. Reuters reported, citing people involved, that Musk’s public endorsement rattled some insiders and could delay talks by several weeks, with one source calling the disclosure a “mess” because it raises doubts about whether Tesla shareholders are well represented.
“A deal where one man runs both sides will draw tough questions on governance,” eToro analyst Josh Gilbert said. Business law professor Jill Fisch told Marketplace that SpaceX’s structure gives Musk “a tremendous amount of control” that he could extend to Tesla. Fortune noted that SpaceX’s charter limits shareholder lawsuits and bars regular investors from removing the CEO. Not everyone is worried about the outcome: CFRA’s Garrett Nelson puts a 90% probability on a deal closing before the end of next year.
Texas, not Delaware
Tesla left Delaware for Texas in June 2024, after a Delaware judge voided Musk’s 2018 pay package. Since then Texas has overhauled its corporate law, and Tesla adopted a bylaw in May 2025 requiring a shareholder to own 3% of the company, tens of billions of dollars of stock, before filing a derivative suit, as Bloomberg Law reported. That makes the vote the main leverage ordinary holders have. A majority of all outstanding shares is a high bar because shares that do not vote, including broker non-votes, count against the deal. It is not yet clear whether Musk will vote his own roughly 20% or whether the committees will demand a majority of the shares he does not own.
The SolarCity precedent
Everyone involved remembers 2016. Tesla bought SolarCity, a solar company Musk co-founded and in which he was the largest shareholder, for about $2.6 billion. Shareholders sued, arguing Musk had steered a bailout. Tesla’s other directors settled for $60 million in 2020; Musk went to trial and won in April 2022, and the Delaware Supreme Court affirmed in June 2023 under the strict entire fairness standard, as McGuireWoods summarized. The trial judge still faulted Musk for not stepping back more fully. That is exactly why he keeps saying he is not in the room this time, and why his “good idea” remark worries the people who are.
What to watch next
Watch for three things: whether the committees announce advisers and a framework, whether a proposed exchange ratio leaks, and whether Tesla sets a separate special meeting for a vote. Barclays has floated an announcement around the December 3 meeting or within six to 12 months. Until then, the $3.5 trillion company is a sum on a spreadsheet, and Musk’s trillion dollar math depends on a shareholder vote he has already called “quite a high hurdle.”
Sources and further reading
- UNILAD Tech: What merging Tesla and SpaceX could mean for Elon Musk’s fortune
- CNBC: Musk says Tesla and SpaceX formed special committees to discuss merger
- CNBC: SpaceX stock jumps after earnings beat and Musk hints at Tesla tie-up
- CNBC: SpaceX IPO takeaways
- Fortune: Tesla and SpaceX are weighing a $3.5 trillion merger
- Fortune: Merger talks put Musk’s accountability to the test
- Fortune: Musk’s dream merger is a nightmare for SpaceX shareholders
- TechCrunch: SpaceX and Tesla boards form special committees
- Reuters (via Investing.com): Musk’s public endorsement may throw a wrench in talks
- Bloomberg: SpaceX combines with xAI
- Benzinga: RBC models SpaceX buying Tesla at $480 a share
- TipRanks: Merger could hand Musk majority voting control
- Electrek: Tesla and SpaceX take first step towards merger
- Marketplace: Elon Musk wants to merge SpaceX and Tesla
- Al Jazeera: Tesla shareholders approve Musk pay plan
- Bloomberg Law: Tesla emerges as test for Texas curbs on shareholder power
- McGuireWoods: Delaware Supreme Court upholds SolarCity acquisition
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