Elon Musk is once again floating the idea of a “convergence” between his companies, and it’s sending ripples through the tech world. According to Teslarati, this could mean a strategic fusion of Tesla and his AI venture, xAI.

The talk kicked into high gear after Musk amplified comments from a Morgan Stanley analyst, Adam Jonas, about a potential “Muskonomy.” Jonas sees the two companies as deeply linked.

“We don’t think investors understand just how important xAI is to Tesla and the broader Muskonomy,” he wrote in a note.

Musk responded, “My companies are, surprisingly in some ways, trending toward convergence.”

For customers, a merger could be a double-edged sword. On one hand, it could leverage xAI’s power to speed up Tesla’s Full Self-Driving and Optimus robot development. But this is happening as Tesla’s global sales growth slowed in 2025, with the Cybertruck struggling to meet its initial hype.

And while investors focus on sales, this convergence highlights a different, planet-sized headache: the massive environmental cost of AI. One report on Grok 4 noted its training released 154,000 tons of carbon pollution — roughly the same emissions as three years’ worth of flights by a commercial jet.

These merger murmurs have been around for some time. Musk’s biographer, Walter Isaacson, recently predicted a merger is likely. But the timing is messy. Investors just approved a massive pay package for Musk that could top $1 trillion. At the same time, a separate shareholder proposal to let Tesla invest directly in xAI failed to get enough votes.

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Online, reactions to Musk’s plans are, as usual, split.