Approval from 50% of Tesla shareholders a condition for any potential SpaceX merger
Key Facts
The committees involved at Tesla and SpaceX have not reached an agreement on the terms of a potential merger, Ars Technica reported, citing Elon Musk. Musk said completion of the deal was not guaranteed and that putting it to a vote of Tesla shareholders would first require the two committees to agree on the terms. If the proposal reaches a vote, it would need approval from 50% of all Tesla shareholders, he said. That places shareholder approval among possible later steps, rather than as part of an existing agreement between the companies. Neither company has announced a final objective for the merger or its terms.
Potential approval procedures at SpaceX include review by its special committee, its board and the controlling shareholder, according to a company disclosure cited by Reuters. Reuters reported that this step requires Musk’s approval. Those approvals would be in addition to the Tesla shareholder vote condition Musk mentioned, and the need for the two committees to agree on the terms before a vote takes place. Any progress on the deal is therefore tied to multiple approval stages at both companies. The disclosure does not establish that those stages have been completed or that the deal has been finalized.
SpaceX’s interest in chips comes as its artificial intelligence business became the company’s largest by revenue in the third quarter of 2026, according to The Associated Press. Starlink nevertheless remained the company’s largest source of profits in the same period, the agency reported. The difference between the two measures means that AI’s lead in revenue did not make it the largest source of profits. In this context, SpaceX describes its joint Terafab initiative with Tesla as a way to expand vertical integration. The company says the project aims to address a potential chip shortage, improve performance and perhaps reduce computing costs; Intel has also joined the project.
The initiative aims to produce computing hardware with a capacity of one terawatt per year once the facility is operational, according to a SpaceX prospectus. The company plans a vertically integrated factory with more than 100 million square feet of manufacturing space, according to its official update. It said planned production includes chips for edge computing, inference and space-based computing infrastructure. The offering document also describes a plan to combine photomask design, logic and memory chip manufacturing, and advanced packaging in a single factory. At the same time, the company said it would continue to buy a large portion of its computing hardware from outside suppliers.
SpaceX estimated capital investment for Terafab’s first phase at about $16.8 billion and selected a site for the factory in Grimes County, Texas. But project details, timelines, milestones and capital spending have not been finalized in separate agreements, according to the company’s prospectus; projects carried out under the broader framework are subject to separate negotiations and agreements. SpaceX also warned that Terafab may not succeed and that it might then be unable to secure enough AI chips for its orbital computing needs. These risks show that the project is an initiative to secure chip supplies, not an announced guarantee that they will be available. In trading on October 30, 2026, Tesla shares closed at $399.81 and SpaceX shares at $134.72, according to EL7 data.
Separately, The Associated Press reported that SpaceX planned to attempt the following month to catch a Starship rocket and its spacecraft with mechanical arms as they returned to base. The agency said the attempt would test reusability. The information did not specify a more precise calendar date than the following month relative to the report published on October 20, 2026. The catch attempt remains a test of the Starship program, while merger talks have yet to produce an agreement on terms. Any potential vote by Tesla shareholders remains contingent on the two committees agreeing on those terms.