Before its initial public offering in June, SpaceX described its chief executive, Elon Musk, as the driving force behind the company's growth, innovation and operational success, and warned that losing him, whether through death, disability or any other reason, could significantly affect its management structure.
The disclosure, known in corporate filings as "key person risk," points to a central problem at the heart of Musk's business empire, which spans rockets, robots, satellites and artificial intelligence and carries the stated goal of making life multiplanetary: Musk may be a once-in-a-generation talent, but he is not immortal.
Dan Ives, a veteran technology analyst and one of Musk's most prominent backers on Wall Street, said there is only one Elon Musk and that no one will create another like him. Ives said that is both a blessing and a curse, because investors buying shares in Musk's companies are betting as much on him personally as on the businesses themselves.
A risk that reaches ordinary investors
Key person risk is not new. Some Tesla shareholders have previously tried to block Musk's pay packages partly because they believe the company depends too heavily on him. It is also not unique to Musk: any company with a celebrity chief executive seen as essential to the business faces a similar problem.
But Musk's particular vulnerability now extends well beyond the boardroom and could touch millions of small investors exposed to one or both of his companies through index funds. Tesla, valued at $1 trillion, is a major component of both the Nasdaq 100 and the S&P 500, the most popular destination for passive investors seeking steady long-term returns.
SpaceX, now valued at nearly $2 trillion following its record June IPO, has moved quickly onto the Nasdaq and could be added to the S&P 500 as early as mid-2027. Together, the two companies represent about $3 trillion in market value, a figure many believe is inflated by what is sometimes called the "Musk multiple," an unofficial and largely unquantifiable premium reflecting investors' willingness to follow the world's richest person as he pursues ambitious, still largely theoretical goals such as orbital data centers, colonizing Mars, or mass-producing commercially viable humanoid robots, a vision he repeated on Tuesday in a speech at the G20 summit in North Carolina.
Betting on Musk without knowing it
Musk's loyal followers have historically been rewarded with strong returns. Tesla, which went public in 2010, has by far the largest market value of any automaker in the world, despite never coming close to matching the sales of rivals such as Toyota or General Motors.
But it is not only devoted followers who hold stakes in his companies. Millions of people unknowingly own shares through 401(k) retirement plans, since funds that track an index are effectively required to buy a company's stock to keep mirroring that index's performance. The Nasdaq alone has more than 200 such products, including the Invesco QQQ fund and the iShares Nasdaq 100 ETF, which together hold more than $800 billion in assets.
Tim Quigley, a professor of strategic leadership and governance at the International Institute for Management Development, said that if Musk suddenly became unable to lead, a large share of that $3 trillion in value would evaporate, calling it something enormous because many people believe his entire empire comes down to him alone. Quigley said the market is probably underestimating the risk.
Ross Gerber, co-founder of the investment firm Gerber Kawasaki, told The Information earlier this year that a good trillion dollars of SpaceX's market value is essentially just Musk, and that the company has no succession plan and no future if something happens to him. SpaceX and Tesla did not respond to requests for comment.
The succession question
The outsized value Musk brings to his companies reflects a wider trend that has alarmed corporate governance experts: the rise of the "genius founder." Mary-Hunter McDonnell, an associate professor of management at the Wharton School of the University of Pennsylvania, said a growing number of companies are allowing their founders to become the main source of value creation, particularly in the technology sector, with governance structures that include very few checks.
Musk, who founded SpaceX in 2002, controls 48 percent of the company through a combination of Class A shares, which the public can buy and which carry one vote each, and Class B shares with outsized voting rights reserved for executives. Because he controls the vast majority of voting shares, Musk effectively has full control of the board and can only be removed if he chooses to resign.
SpaceX does not appear to have a formal succession plan, something governance experts consider essential for limiting key person risk and preventing shareholder panic if a tragedy occurs. In its IPO prospectus, SpaceX acknowledged it is highly dependent on Musk's continued service and performance, calling his leadership, vision and experience essential to developing its technology and executing its business strategy. The company also said it does not carry key person life insurance on Musk and is not certain how, or even whether, it could replace him.
The prospectus stated that identifying a successor with Musk's combination of skills and experience could be a long and uncertain process, with no guarantee the company could attract or retain a suitable replacement in time, or retain one at all.
Musk has never publicly outlined a succession plan at Tesla, though he told the Wall Street Journal in 2023 that he has identified specific individuals for the board he would want to take over if something unexpected happened to him. Musk, 55, has deputies at both SpaceX and Tesla with experience running day-to-day operations when he turns his attention elsewhere, as he did in early 2025 to oversee the dismantling of federal government positions under the Trump administration. Craig Crossland, dean of the Neeley School of Business at Texas Christian University, said the question is whether Musk's distinctive vision and abilities have been institutionalized among those deputies, adding that there has not yet been an opportunity to see whether that is true.
The lesson of Steve Jobs
Every analyst and governance expert consulted pointed to the same historical comparison: Steve Jobs, the co-founder and longtime chief executive of Apple, who died in 2011 at age 56. Like Musk, Jobs was seen as a genius founder whose personality was deeply tied to his company's identity, which left Apple shares vulnerable to rumors about his health after his 2004 cancer diagnosis became public. In 2008, a false online report of Jobs' death sent Apple shares down 9 percent.
Tesla shares have shown similar sensitivity to news about Musk. When Musk told the New York Times in 2018 that he was working 120-hour weeks and taking Ambien to sleep amid rising scrutiny of Tesla, the stock fell sharply. In 2025, while Musk focused on his government efficiency department in Washington, Tesla shares lost nearly half their value between January and April.
Apple was widely criticized in the late 2000s for not disclosing more about Jobs' health, especially as concern over his frail appearance weighed on the stock. But Jobs, who disliked formal succession planning and kept tight control over operations, still took the issue seriously, governance experts said. Years before his death, he created a secret internal executive training program known as Apple University to try to keep his vision alive within the company after he was gone. Quigley said Jobs believed the company was bigger than any one person, and credited him with the foresight to build a program that could pass those values to the next generation of leaders.
When Jobs resigned in August 2011, his hand-picked successor, Tim Cook, was already a familiar figure on Wall Street seen as a stabilizing force. Apple shares briefly fell 5 percent before recovering.
Musk's companies are not the only ones facing key person risk, but few others approach the combined market scale of Tesla and SpaceX, and no other chief executive rivals Musk's ability to captivate Wall Street. Ives said a succession plan will eventually have to be addressed, adding that investors understand the risk and factor it in, even if it remains in the background for now.
