SpaceX and Tesla Boards Form Special Committees to Weigh a Merger as SpaceX Reports a $4.4 Billion Quarter
Musk told investors the boards acted at shareholder request and that he sits on neither committee. The same call showed AI now supplies more than half of SpaceX revenue.
Outspoken Digest Technology Desk
Wednesday, October 21, 2026/2 min read
Elon Musk has run into the awkward part of his own idea. The boards of SpaceX and Tesla have each set up a special committee of independent directors to look at a possible merger, and Musk, who is the biggest individual shareholder in both companies, is barred from the room.
He disclosed it on SpaceX's third-quarter earnings call on Tuesday, TechCrunch reported. Musk said the committees were formed at shareholders' request, that they have reached no agreement, and that nobody should assume a deal is coming.
What did Musk say about the SpaceX Tesla merger?
Musk told analysts, according to NBC News, that some people treat a merger as a certainty, and that it is not. Because he is a conflicted party under securities rules, he is on neither committee and not part of the talks. He called the process an "odd Kabuki dance" in which others talk and he cannot join.
He still sounded in favour. He said there is a lot of merit in combining the companies and pointed to AI software, chip design and robotics. TechCrunch adds that he cited SpaceX's orbital data centre project, Starmind, and Terafab, the chip manufacturing project the two companies share.
Neither company named the committee members. Tesla's proxy filing of 19 October lists seven independent directors, among them Robyn Denholm and Ira Ehrenpreis, but reports do not say who sits on the committee. NBC notes that Tesla invested about $2 billion in January in an AI startup that is now a SpaceX subsidiary.
How hard would the shareholder votes be?
The two companies face very different arithmetic. Musk holds more than half of SpaceX's voting power since its flotation, which would make a SpaceX vote easier to win. At Tesla, he said a merger would need approval from 50 percent of all shareholders, not just those who turn up to vote, which TechCrunch describes as a much bigger hurdle.
The call did not settle who would buy whom, on what exchange ratio, or how the conflict would be handled. None of that has been announced.
What did SpaceX's third-quarter results show?
The numbers explain why the AI argument carries weight. SpaceX reported revenue of $14.6 billion, up 161 percent on a year earlier, and net income of $4.4 billion, according to a breakdown by TIKR. Its Super Intelligence segment, which holds Grok, the Cursor coding tool and the company's rented-out compute, brought in $7.56 billion, or 51.9 percent of the total.
TechCrunch reports that segment made an operating profit of $431 million, after $1.2 billion of one-time stock compensation tied to the Cursor purchase. Capital spending reached $19.6 billion in the quarter, and SpaceX expects $35 billion to $40 billion in the fourth.
It also guided to first-quarter 2027 revenue of $33 billion to $37 billion. Musk told investors the Super Intelligence business could reach annual recurring revenue of $500 billion to $1 trillion by the end of 2027, a forecast and not a result.
What happens next?
The committees will have to decide whether a combination serves each company's own owners, with advisers, valuations and votes still ahead. Until they report, the only firm facts are the committees' existence, the Tesla filing and one quarter in which an AI business, not rockets or satellites, produced more than half of SpaceX's revenue.
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