Musk Wants to Build a $3 Trillion Company. He Can't Be in the Room

Elon Musk wants to merge SpaceX and Tesla.

He said it on the Q3 earnings call Tuesday night. Both boards have formed special committees of independent directors to talk it through. And Musk called the idea “good.”

But here's the catch. He can't be in the room.

Musk owns more than 50% of SpaceX's voting power. He's the CEO of Tesla. He sits on both boards. That makes him what lawyers call a “conflicted party.” So two groups of people are talking… and the man who runs both companies is locked out of the conversation.

He described it himself as “an odd kabuki dance.”

Let me explain why this matters for your money.

A combined SpaceX-Tesla would be worth more than $3 trillion. That would make it one of the most valuable companies on Earth — trailing only Apple and Microsoft. And it would bring together rockets, satellites, AI chips, EVs, robots, and the largest orbital data center project ever planned — under one roof.

The bull case is loud. Dan Ives at Yorkville Ives called it a “no-brainer.” Gene Munster at Deepwater Asset Management put the odds of a deal at 95% within two years.

But I'd pump the brakes.

Tesla shareholders hold the keys. And the lock is hard to pick. Musk noted that Tesla needs a 50% vote from all shareholders — not just those who show up. That's a huge bar. In most votes, a big chunk of shares simply don't get cast.

And Tesla's stock tells a story of its own. Wall Street expected Q3 EPS of $0.45… down 10% from a year ago. Revenue flat at $28 billion. The Optimus robot is still years from revenue. Margins are under pressure.

So why would Tesla shareholders hand their company to SpaceX?

Musk's answer is Terafab and Starmind. Terafab is a $119 billion chip factory in Texas. It would make custom chips for Tesla cars, SpaceX orbital data centers, and AI training. Starmind is the plan to put compute in orbit. Together, they could turn SpaceX into a chip-to-cloud-to-car stack that no one else on Earth can match.

Now, I know what you're thinking. “This sounds like hype.”

And you might be right. The special committees have not agreed on any terms. Musk said so himself. No price. No structure. No timeline. Barclays floated the idea that SpaceX would be the buyer in an all-stock deal. But nothing is signed.

Meanwhile, SpaceX just posted its first operating profit as a public company. It doesn't need Tesla.

So watch the committees. Watch the Tesla vote math. And don't trade the headline.

This is a story that will take months to play out… if it plays out at all.

Where should you invest $100 right now?

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And he's predicting it will launch a NEW industry that will grow more than 7 million percent in the coming years.

Even if he's only 10% right, that would still be enough to grow $100 into more than $700,000.

Click here to see the details on what Elon Musk called "an infinite money glitch."

Understand the governance here, because it's the whole story. When a controlling shareholder sits on both sides of a deal, letting him negotiate it would be a lawsuit waiting to happen. So both boards set up special committees of independent directors — people with no ties to Musk — to weigh the merger and bargain at arm's length. Musk, his brother Kimbal, Gwynne Shotwell, and Antonio Gracias are all excluded as non-independent. It's the standard structure for a controlled-company deal… and it exists to protect minority shareholders. Watch for an 8-K filing naming committee members or advisors; that's when talk becomes a real process.

Follow the math, because this is where a deal lives or dies. Any merger would need approval from a majority of all outstanding Tesla shares — not just the shares that actually vote. Musk called it “quite a high hurdle,” and it is: in a typical shareholder vote, a big slice of shares never get cast at all, so a 50%-of-everything threshold is far steeper than a normal majority. Musk's own Tesla stake helps, but it's nowhere near enough alone. The SpaceX side is easier, given his 50%-plus voting control there. Watch the Tesla annual meeting and proxy; that's the battlefield.

Here's the strategic pitch, and the reason the idea isn't crazy. Musk argues the two companies already overlap — shared AI, shared chips, SpaceX even buying Tesla vehicles. A merger would fuse Tesla's cars and robots, SpaceX's rockets and Starlink, a planned Texas chip mega-fab, and an orbital-compute project into a single vertically integrated stack: design the chip, train the AI, run it in orbit, put it in a car. No rival combines all of it. The risk is that fusing a profitable, private-feeling rocket company with a public automaker under pressure dilutes the strong side. Watch whether the committees see synergy or a bailout.

Watch for an official filing, not more talk.

Here's why that's the line that matters. Right now, this is a disclosure on an earnings call — a controlling shareholder saying committees exist and he likes the idea. It becomes a real transaction only when either company files formal documents naming committee members, hiring bankers and lawyers, or — eventually — proposing actual terms.

Until then… there's nothing to trade. Musk himself said there's no price, no structure, and no timeline, and that assuming a deal is certain “would be overstating it.” A merger of this size and complexity would take many months even if everyone agreed tomorrow.

Why the caution is warranted. Big Musk announcements have a history of moving stocks first and resolving slowly — sometimes not at all. The gap between “committees are talking” and “shareholders approved a signed deal” is enormous, and it runs straight through that steep Tesla vote.

There's an upside path, too. If the committees hire advisors and a structure leaks — say, the all-stock purchase some analysts expect — the story graduates from speculation to process, and the real negotiation begins.

So watch two markers in the coming months: an 8-K or proxy that formalizes the committees, and any hint of actual terms. Those, not the headline, tell you whether this is real.

Let's keep this simple.

Imagine one person owns most of two companies and runs both. Now imagine those two companies want to do a deal with each other. Who negotiates for each side…

If the same person sits on both sides of the table, there's an obvious problem: he can't bargain hard against himself. And whichever company gets the worse end, its other shareholders get hurt.

That's exactly the knot with SpaceX and Tesla. Musk controls both. So if he set the price, minority shareholders could rightly ask whether he favored the company he owns more of.

The fix, built over decades of corporate law… is the special committee.

Each company hands the decision to a small group of independent directors — board members with no financial ties to Musk. They hire their own bankers and lawyers, and they negotiate against each other as if Musk weren't there. He's a “conflicted party,” so he's shut out of the room.

Musk called it an “odd kabuki dance,” and that's a fair description. The man who runs both companies has to sit quietly while two sets of his own directors argue over a deal he wants.

Here's why this protects you, even if you never own a share. The structure exists so that a powerful insider can't quietly transfer value from one group of shareholders to another. The independence is the safeguard.

But it cuts both ways. Special committees can say no. They can demand a higher price, a better structure, or walk away entirely. That's the point — they answer to shareholders, not to Musk.

So the “kabuki dance” isn't a formality to roll your eyes at. It's the actual mechanism that decides whether this merger happens, and on whose terms.

Follow the independent directors, not the famous founder — in a controlled-company deal, they're the ones who actually hold the pen.