Tesla-SpaceX Merger Talks Would Create a $3.5 Trillion Giant

By Olivia Hart

Tesla and SpaceX independent directors have formed special committees to explore a merger that, at current market values, would create a company worth roughly $3.5 trillion. Elon Musk said Tuesday he cannot participate in the talks because he is a "conflicted party." That is a word choice worth noting. Being conflicted has not stopped him before.

On SpaceX's third-quarter earnings call, Musk said: "This is definitely the kind of question where I feel like I'm tap dancing through a minefield." He added it would be "overstating it" to call a merger a certainty. The talks reopen a question that has shadowed Musk since SpaceX's June IPO made him the world's first trillionaire, at least on paper: who, if anyone, holds him accountable?

How much is Musk actually worth?

SpaceX priced its IPO at $135 a share and began trading under the ticker SPCX on June 12. The stock closed its first day at $161.11, up nearly 20%, and market value topped $2 trillion during the session. Per SpaceX's IPO filing, reported by CBS News, Musk held about 4.8 billion shares plus 350 million options exercisable at $8.39 each—enough to push his net worth past $1 trillion at the offering price.

The title has been unstable. Musk has called himself a "former trillionaire." Forbes said he regained trillionaire status on Oct. 9, then pegged his net worth at $977.2 billion on Oct. 13 after SpaceX shares slid. Much of that wealth sits in stock he cannot sell for a year under the IPO lockup.

The scale is still hard to grasp. Only 19 countries have a GDP above $1 trillion, according to World Bank data cited by CBS. Nabil Ahmed, Oxfam America's senior director of economic justice, called Musk's fortune a "new Gilded Age," saying: "Elon Musk's rise to trillionaire status marks a new pinnacle of oligarchy."

Who controls SpaceX?

SpaceX went public with a multi-class share structure in which Class B shares carry 10 votes apiece. Musk owns about 45% of the company but controls roughly 82% of the voting power, Fortune reported.

Only Class B holders can remove Musk as CEO, chairman, or director. SpaceX uses the "controlled company" exemption to skip a majority-independent board and independent nominating and compensation committees. The company reincorporated from Delaware to Texas in 2024, and its charter pushes shareholder claims into mandatory arbitration while limiting derivative suits to investors holding at least 3% of the stock—a stake worth tens of billions of dollars.

In a May 13 letter, CalPERS and the New York City and New York State comptrollers warned the structure "would constitute the most management-favorable governance structure ever brought to the U.S. markets at this scale."

Musk's upside is also exceptional. SpaceX's board set aside 1 billion super-voting shares for him, vesting only if the company hits market-cap milestones up to $7.5 trillion and establishes "a permanent human colony on Mars with at least 1 million inhabitants."

What about deals between Musk's own companies?

In November 2025, Tesla shareholders weighed a nonbinding proposal to invest in xAI, Musk's AI startup. About 1.06 billion shares voted for it and 916.3 million against, with more than 473 million abstaining. Because Tesla's bylaws count abstentions as votes against, the measure failed, Bloomberg reported.

In January, Tesla disclosed a $2 billion investment in xAI anyway. Musk's response: "We're just doing what shareholders asked us to do, pretty much." Days later, SpaceX acquired xAI in a deal valuing the combined company at $1.25 trillion.

Tesla also did more than $573 million in business with Musk-controlled companies in fiscal 2025, including $430.1 million in Megapack battery sales to xAI and $143.3 million in Cybertruck sales to SpaceX, according to a Transparency Lab analysis of Tesla's SEC filings. Tesla's audit committee deemed the deals arm's length; the analysis does not allege illegal conduct.

Have regulators or courts had any reach?

Limited. In 2018, Musk tweeted: "Nothing stopping Tesla team at our car plant from voting union… But why pay union dues & give up stock options for nothing?" The NLRB ruled the post an illegal threat and ordered it deleted; a Fifth Circuit panel upheld that in 2023. But in October 2024 the full court ruled 9-8 that the NLRB had no power to order removal, citing the First Amendment.

The SEC sued Musk in January 2025, alleging he waited too long to disclose his Twitter stake and cost other shareholders more than $150 million. He settled for a $1.5 million penalty without admitting wrongdoing. Judge Sparkle Sooknanan approved the deal in July despite "serious misgivings," noting the court is "not a rubber stamp" but can reject only settlements that are clearly unreasonable.

What is happening at Starbase?

A TechCrunch analysis of OSHA data found SpaceX's Starbase site in South Texas recorded 4.27 injuries per 100 workers in 2024—almost six times the average for comparable space-vehicle manufacturers and nearly triple the 1.6 rate for aerospace manufacturing overall. United Launch Alliance and Blue Origin sites reported rates near 1.1.

NASA is paying SpaceX more than $4 billion for two crewed Starship moon landings. Under its contracts, a high injury rate alone is not an automatic trigger for action and does not meet the definition of a "major breach of safety," which covers a fatality or a willful or repeat OSHA violation, TechCrunch reported.

In January, OSHA cited SpaceX for seven "serious" violations tied to a June 2025 crane collapse at Starbase, with penalties totaling $115,850; SpaceX is contesting them. On May 15, a worker died at the site. OSHA opened an investigation it said could take months.

Do others share the upside?

About 4,400 SpaceX employees stood to become millionaires once the stock began trading, the New York Times reported. Fortune profiled workers from top executives to welders whose equity is now worth seven figures or more.

The proposed Tesla tie-up may be the clearest test yet of whether outside shareholders still have a meaningful say. Musk said a combination would require approval from a majority of all outstanding Tesla shares—"quite a high hurdle," in his words. Tesla's annual proxy, filed Monday, includes no merger proposal. Until one appears, the minefield metaphor stands.