SpaceX and Tesla Boards Form Special Committees to Weigh Merger

The boards of SpaceX and Tesla have each formed special committees of independent directors to review a possible merger, Elon Musk said during SpaceX's third-quarter earnings call. Musk, CEO and the largest individual shareholder of both companies, said shareholders requested the committees — and that he's shut out of the process entirely.

"Because I'm a conflicted party, I can't actually be in the discussions of the special committees, so it's this sort of a … it's an odd kabuki dance where two groups of people are talking, and I can't be in the conversation," Musk said in response to a question on the call.

Musk didn't name the committee members. He only confirmed they are independent directors. The takeaway: the two most valuable companies in Musk's orbit are negotiating a potential combination without the person who controls both.

Who actually sits at the table?

Tesla has seven independent board members under Nasdaq's listing standards, according to the company's October 19 proxy filing:

• Board chair Robyn Denholm
• Ira Ehrenpreis, who is also a committee chair
• Former Tesla CTO JB Straubel
• Joe Gebbia
• Jack Hartung
• James Murdoch
• Kathleen Wilson-Thompson

Neither Musk nor his brother Kimbal Musk qualifies as independent. Denholm, Gebbia, Ehrenpreis, Hartung, Murdoch, and Wilson-Thompson sit on a variety of established committees overseeing audit, compensation, and corporate governance.

SpaceX lists six independent directors: Ehrenpreis — who is also the chair of SpaceX's compensation and nominating committee — along with Randy Glein, Donald Harrison, Steve Jurvetson, Luke Nosek, and Roelef Boutha.

Antonio Garcias, Musk, and SpaceX president and chief operating officer Gwynne Shotwell sit on the SpaceX board but are not considered independent. Garcias once sat on Tesla's board. He founded and leads Valor Equity Partners, which holds a 3.4% stake in SpaceX. Garcias' firm also financed SpaceX's AI hardware purchases through leaseback arrangements.

Ehrenpreis is the one name that appears on both independent rosters, and that overlap — plus Garcias' financial ties across both companies — will draw scrutiny if talks advance.

Is the merger a done deal?

No. Musk supports the idea but cautioned it is not a guaranteed outcome.

"I think some people out there assume that a SpaceX and Tesla Motor is a certainty, and I think that would be overstating it," Musk said, adding that he thinks it would be a good idea. "At the end of the day, the shareholders have to be supportive of this."

The special committees have not reached agreement on the terms of any transactions, he said.

The arithmetic favors SpaceX. The company's IPO cemented Musk's grip — he holds more than 50% voting power — which would make it easier to garner support for a merger from SpaceX shareholders. Tesla is a much bigger hurdle. The company would need a 50% vote from all shareholders, not just those who vote, Musk noted.

In plain terms: Musk can ram a deal through at SpaceX but has to win over Tesla's broader — and often skeptical — retail base.

Why combine a rocket company with a carmaker?

Musk framed the strategic case around AI. "I do think there's a lot of merit to combining the companies as we are pretty much in the superintelligence singularity," he said. He pointed to concrete areas of cooperation:

• AI software development
• Robotics
• SpaceX's orbital AI data center project Starmind
• Terafab, the joint chip manufacturing project between Tesla and SpaceX

Those four programs form the actual commercial logic behind the talks — computing power in orbit, chips built jointly, and AI models shared across both companies.

The next signal to watch is whether either committee agrees on deal terms and brings a vote to shareholders — Musk has already said that without Tesla's approval, there is no merger.