Elon Musk teases large merger: ‘Trending in the direction of convergence’

Elon Musk not too long ago amplified the ideas of Morgan Stanley analyst Adam Jonas, who had perception into the “Muskonomy” of his probably interconnected ventures, one thing that was proposed on the latest Tesla Shareholder Assembly with xAI.

Musk’s phrases point out a potential strategic fusion that might function a blueprint for future innovation–however it’s depending on a conglomeration between the numerous entities the CEO serves.

As Tesla grapples with scaling Optimus and getting ready for its imminent manufacturing and the event of the Full Self-Driving suite, xAI’s computational edge may present leverage for the thousands and thousands of miles of knowledge the corporate accumulates, offering a extra secure and correct improvement technique for the autonomous and AI efforts it has put its chips all in on.

After Tesla Shareholders voted to deny Tesla and xAI’s potential monetary partnership by way of an funding, Jonas stated it was a problem that must be revisited resulting from its significance.

xAI has the chance to offer an unbelievable strategic and monetary bolstering to Tesla, particularly with how essential a job information performs within the improvement of the corporate’s largest merchandise.

Jonas wrote in a observe to buyers:

“They’re gonna need to revisit this. We don’t assume buyers perceive simply how essential xAI is to Tesla and the broader Muskonomy. Tesla’s relationship with xAI (financially and strategically) is deterministic to the long-term success of Tesla due partially to the pure synergies of knowledge, software program, {hardware}, and manufacturing in recursive loops. The values (and worth programs) of each Tesla and xAI are endowed by the values of their shared creator. We imagine this co-determination turns into extra apparent within the subsequent phases of bodily AI/ autonomy for Tesla within the yr forward.”

Musk stated, in response to Jonas’ observe, that his corporations are “surprisingly in some methods, trending towards convergence.”

My corporations are, surprisingly in some methods, trending in the direction of convergence

— Elon Musk (@elonmusk) November 10, 2025

Mergers and shared ecosystems between corporations will not be new strikes out of Musk’s playbook, because it has been achieved previously, particularly with Tesla buying different entities.

It did it with SolarCity in 2016 and with Maxwell Applied sciences in 2019. Investments between Musk corporations have occurred earlier than, too, as SpaceX dumped $2 billion into xAI final July.

He’s additionally stated on a number of events that he may finally convey all the things collectively into some kind of single entity. In July 2024, he stated:

“I’m not against the thought in precept, however I’m unsure there’s a pragmatic or authorized method to merge them. There’s additionally worth in fairness incentives of individuals on the corporations being tied to that firm’s accomplishments.”

This level is very related now with Musk’s not too long ago authorised compensation bundle.

He additionally stated in June, throughout an interview with CNBC that “It’s not out of the query” for xAI to merge with Tesla, nevertheless it must be authorised by shareholders. Just some days later, he stated he wouldn’t help xAI merging with Tesla; nonetheless, he put it in buyers’ fingers.

It’s greater than only a deal; it’s symbiotic. Musk being on the helm of varied corporations, all intertwined with each other, helps foster recursive innovation. Regardless of these benefits, there are nonetheless a handful of issues to contemplate, particularly from a regulatory perspective.

Nevertheless, it’s not competitors; it’s convergence. In Musk’s universe, particularly from a enterprise sense, mergers will not be endpoints, however as a substitute launchpads for ambitions that purpose to take every firm from Earth to lands past our ambiance.