Tesla–SpaceX Merger Could Give Elon Musk More Control and Accelerate AI Ambitions

SpaceX has indicated in public financial filings that much of its future revenue could come from orbital data centers supporting artificial intelligence computing on Earth. Tesla, meanwhile, is focused on sophisticated self-driving cars, robots and industrial hardware. Both companies require advanced computer chips and substantial energy, creating potential strategic synergies.

SpaceX could also provide connectivity for Tesla hardware, adding another possible benefit to a combination of the two companies. Beyond those business links, a merger could be attractive to Elon Musk because it may give him greater control over the combined company.

How a merger could change Musk’s control

Musk owns more than 82% of SpaceX’s voting rights, according to SpaceX documents filed as part of the IPO. By contrast, he owns about 20% of Tesla’s voting power.

By merging SpaceX with Tesla, where Musk has less direct control, he could potentially obtain a majority of the voting shares in the combined company. The outcome would depend on the valuation, deal structure and agreements negotiated at the time of the merger.

When Musk made the announcement, SpaceX and Tesla had approximate market valuations of $2 trillion and $1.5 trillion, respectively.

Regulatory and shareholder scrutiny

The proposed merger would face scrutiny from U.S. regulators. Morningstar reported earlier this year that significant disagreements could emerge over the companies’ valuations, particularly among Tesla shareholders.

Musk said Tuesday that 50% of all Tesla shareholders—not only Tesla’s voting shareholders—would need to approve the merger. However, shareholders would vote only if the two special committees first reach an agreement on the terms of the transaction.

Some political leaders are already wary of Musk’s outsized power and influence, as well as his willingness to use both. Those concerns could lead to opposition to uniting his large corporations.

What the Tesla–SpaceX combination could mean

It remains unclear how a merger would affect SpaceX’s traditional space operations, its long-held goal of settling Mars, or Tesla’s earlier ambitions to bring electric vehicles to the global market.

Instead, the unification of Musk’s companies could place greater emphasis on artificial intelligence and the computing power needed to support those ambitions. The result could mean less focus on Mars and cars—and more focus on silicon.