Elon Musk wants Tesla and SpaceX to become one company. He says the decision isn’t his, and he even has a phrase for the process. Speaking on SpaceX’s third-quarter earnings call, he described the special committees now reviewing a merger as “an odd kabuki dance where two groups of people are talking, and I can’t be in the conversation.”
He’s right about the kabuki part. He has the reason wrong.
The pitch is about AI hardware
Musk’s case for combining the companies isn’t really about rockets or cars. He said “we are pretty much in the superintelligence singularity” and pointed to gains from cooperating on AI software, robotics, Starmind (SpaceX’s orbital AI data center project) and Terafab, the joint chip manufacturing effort between Tesla and SpaceX.
Read that list again. Two of the four items already involve both companies or depend on each other’s work. Terafab is joint by definition. So the argument for a merger comes down to this: the AI compute stack Musk is building spans two corporate entities, and he’d prefer it lived in one.
For anyone tracking where frontier AI hardware comes from, that matters. A single entity that controls chip fabrication, a robotics program and data centers in orbit would be a strange and unusually vertically integrated AI player. Whether it’s a good deal for the people who own Tesla stock today is a different question, and nobody has answered it yet. Musk says the committees haven’t agreed on any terms.
The independence question
The committees are made up of independent directors and, according to Musk, exist because shareholders asked for them. That’s the correct procedure. The rosters still deserve a closer look.
Tesla lists seven independent directors under Nasdaq rules: chair Robyn Denholm, Ira Ehrenpreis, former CTO JB Straubel, Joe Gebbia, Jack Hartung, James Murdoch and Kathleen Wilson-Thompson. TechCrunch’s rundown of SpaceX’s board also names Ehrenpreis, along with Randy Glein, Donald Harrison, Steve Jurvetson, Luke Nosek and Roelof Botha. Antonio Gracias sits on SpaceX’s board as a non-independent director. He used to be on Tesla’s board, his firm Valor holds 3.4% of SpaceX, and Valor helped finance SpaceX’s AI hardware.
“Independent” is a listing-standard label. It doesn’t mean these people have no history with Musk. Musk didn’t say who sits on which committee, so it’s unclear whether directors with ties to both sides are negotiating against each other.
Tesla is where this gets decided
On the SpaceX side, approval is close to a formality. The IPO left Musk with more than 50% of the voting power. Tesla is harder, and Musk acknowledged it: a merger needs a majority of all shares outstanding, not just a majority of shares voted. Retail holders who never return a proxy effectively count as no votes.
That’s the leverage, and Tesla shareholders should use it. My position is that they shouldn’t approve any deal until someone puts a number on what Terafab and Starmind are worth to Tesla specifically, separate from what they’re worth to Musk’s broader AI ambitions. “Superintelligence singularity” doesn’t count as a valuation.
Musk said people treating a merger as certain are “overstating it,” and that “the shareholders have to be supportive of this.” Fine. The first test will be whether the Tesla committee publishes who its members are before it publishes any terms.