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Elon Musk said Tuesday that independent directors at Tesla and SpaceX have formed special committees to explore combining the two companies\u2014a deal that, at current market values, would create a roughly $3.5 trillion giant. Musk said he can\u2019t take part in the talks because he is a \u201cconflicted party.\u201d<\/p>\n
\u201cThis is definitely the kind of question where I feel like I\u2019m tap dancing through a minefield,\u201d Musk said on SpaceX\u2019s third-quarter earnings call, adding that it would be \u201coverstating it\u201d to call a merger a certainty.<\/p>\n
The talks put a fresh spotlight on a question that has followed Musk since SpaceX\u2019s June IPO made him the world\u2019s first trillionaire, at least on paper: When one person holds this much wealth and controls this many companies, who holds him accountable?<\/p>\n
A trillion-dollar fortune, on paper<\/p>\n
SpaceX priced its shares at $135 and began trading under the ticker SPCX on June 12. The stock closed its first day at $161.11, up nearly 20%, and the company\u2019s market value topped $2 trillion during the session. According to SpaceX\u2019s IPO filing, Musk held about 4.8 billion shares plus 350 million options exercisable at $8.39 each\u2014enough to push his net worth past $1 trillion at the offering price, CBS News reported.<\/p>\n
That status has proved fragile. Musk has since called himself a \u201cformer trillionaire,\u201d and his fortune has hovered around the line. 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 is also tied up in stock he can\u2019t sell for a year under the IPO lockup.<\/p>\n
Even so, the scale is hard to overstate. Only 19 countries have a GDP above $1 trillion, according to World Bank data cited by CBS. Nabil Ahmed, Oxfam America\u2019s senior director of economic justice, said Musk\u2019s fortune represents a \u201cnew Gilded Age\u201d of wealth inequality. \u201cElon Musk\u2019s rise to trillionaire status marks a new pinnacle of oligarchy,\u201d he said.<\/p>\n
A company built for one person\u2019s control<\/p>\n
The sharpest accountability questions center on how SpaceX is governed. The company went public with a multi-class share structure in which Class B shares carry 10 votes apiece. Musk owns about 45% of SpaceX but controls roughly 82% of its voting power, Fortune reported.<\/p>\n
As Fortune detailed ahead of the IPO, only Class B holders can remove Musk as CEO, chairman, or director. SpaceX uses the \u201ccontrolled company\u201d 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 and limits derivative suits to investors holding at least 3% of the stock\u2014a stake worth tens of billions of dollars.<\/p>\n
In a May 13 letter, CalPERS and the New York City and New York State comptrollers warned that the structure \u201cwould constitute the most management-favorable governance structure ever brought to the U.S. markets at this scale.\u201d<\/p>\n
Musk\u2019s potential upside is also outsize. SpaceX\u2019s board set aside 1 billion super-voting shares for him that vest only if the company hits market-cap milestones of up to $7.5 trillion and establishes \u201ca permanent human colony on Mars with at least 1 million inhabitants.\u201d<\/p>\n
Deals between Musk\u2019s own companies<\/p>\n
Transactions among Musk\u2019s businesses are another pressure point. In November 2025, Tesla shareholders weighed a nonbinding proposal for the carmaker to invest in xAI, Musk\u2019s AI startup. About 1.06 billion shares voted for it and 916.3 million against, with more than 473 million abstaining. Because Tesla\u2019s bylaws count abstentions as votes against, the measure failed, Bloomberg reported.<\/p>\n
In January, Tesla disclosed a $2 billion investment in xAI anyway. \u201cWe\u2019re just doing what shareholders asked us to do, pretty much,\u201d Musk said. Days later, SpaceX acquired xAI in a deal that valued the combined company at $1.25 trillion.<\/p>\n
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 an analysis of Tesla\u2019s SEC filings by Transparency Lab. Tesla\u2019s audit committee deemed the deals to be at arm\u2019s length, and the analysis does not allege illegal conduct.<\/p>\n
Regulators and courts have had limited reach<\/p>\n
Musk\u2019s run-ins with regulators show how difficult he can be to rein in. In 2018, he tweeted: \u201cNothing stopping Tesla team at our car plant from voting union\u2026 But why pay union dues & give up stock options for nothing?\u201d The National Labor Relations Board ruled the post was an illegal threat and ordered it deleted, and a Fifth Circuit panel upheld that decision in 2023. The full court reheard the case in January 2024, and in October 2024 ruled 9-8 that the NLRB had no power to order the tweet removed, citing the First Amendment.<\/p>\n
The Securities and Exchange Commission 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. U.S. District Judge Sparkle Sooknanan approved the deal in July despite \u201cserious misgivings,\u201d noting the court is \u201cnot a rubber stamp\u201d but can reject only settlements that are clearly unreasonable.<\/p>\n
Safety questions at Starbase<\/p>\n
Worker safety at SpaceX\u2019s Starbase site in South Texas has also drawn scrutiny. A TechCrunch analysis of OSHA data found Starbase recorded 4.27 injuries per 100 workers in 2024\u2014almost six times the average for comparable space-vehicle manufacturers and nearly triple the 1.6 rate for aerospace manufacturing overall. Rival sites run by United Launch Alliance and Blue Origin reported rates near 1.1.<\/p>\n
NASA is paying SpaceX more than $4 billion for two crewed Starship landings on the moon. But under its contracts, a high injury rate alone isn\u2019t an automatic trigger for action and doesn\u2019t meet the definition of a \u201cmajor breach of safety,\u201d which covers events such as a fatality or a willful or repeat OSHA violation, TechCrunch reported.<\/p>\n
In January, OSHA cited SpaceX for seven \u201cserious\u201d violations tied to a June 2025 crane collapse at Starbase, with penalties totaling $115,850; SpaceX is contesting them. Then, on May 15, a worker died at the site. OSHA opened an investigation and said it could take months to complete.<\/p>\n
Who else shares in the upside<\/p>\n
Musk isn\u2019t the only one getting richer. About 4,400 SpaceX employees stood to become millionaires once the stock began trading, the New York Times reported, and Fortune profiled workers from top executives to welders whose equity is now worth seven figures or more.<\/p>\n
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\u2014\u201cquite a high hurdle,\u201d in his words. Tesla\u2019s annual proxy, filed Monday, includes no merger proposal.<\/p>\n
#Elon #Musks #trillion #TeslaSpaceX #merger #talks #put #accountability #test<\/p>\n","protected":false},"excerpt":{"rendered":"
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