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Investing.com – Walter Isaacson, biographer of Elon Musk, suggested in an interview on CNBC that a merger between Tesla Inc (NASDAQ:TSLA) and xAI, Musk’s privately held combination of his artificial intelligence startup xAI and social media platform X (formerly Twitter), is a real possibility. Isaacson said such a move would align with Musk’s ambition to transition Tesla from a purely electric vehicle manufacturer to a leading player in physical artificial intelligence.

“I think it’s going to happen,” Isaacson said. “Because Musk, even in my book when he’s starting xAI, [was] talking about [how] these chatbots are fine, but what you need is real world AI. You need to be able to not only take all the texts and tweets that have ever been written, but all the videos from Teslas and the all the Optimus robot seeing and the hearing.”

Expanding on the theme, Isaacson noted that merging the two companies would significantly accelerate the development of real-world AI capabilities. “You will have real-world AI and once again, that will be one order of magnitude increased from what we’re looking at now,” he said.

The potential merger would underscore Musk’s intention to integrate datasets from multiple ventures, including Tesla’s autonomous vehicle footage and Optimus humanoid robots, as well as X’s real-time news, into a unified AI architecture. Isaacson’s comments imply that Musk views Tesla not as an end product, but as a platform for deploying large-scale, sensor-driven intelligence.

“He feels he has to [have] control in a company that’s doing [physical] AI,” Isaacson said, pointing to Musk’s preference for centralized oversight of key emerging technologies. By combining assets from Tesla and xAI, Musk could streamline both development and deployment of physical AI applications.

Investors have speculated that Musk’s end goal could be a mass-merging of all his companies, which besides Tesla and xAI would include Neuralink, a brain-implant startup, SpaceX, a rocket manufacturer and space exploration company, Starlink, a satellite constellation company and subsidiary of SpaceX, and The Boring Company, an underground tunneling and transportation company. A merger between Tesla and xAI would be a first step in this assumed goal.  

If realized, the merger would mark a major evolution in Musk’s industrial strategy, shifting the center of gravity from electric mobility to embodied artificial intelligence. Such a move could reframe Tesla’s identity and valuation, especially given the rising interest in next-generation AI technologies.

By this logic, investors have partially priced-in the potential of Tesla to be the leader of physical AI across many sectors, despite lackluster performance in its core business lately. The stock has seen a surge from lows in March and April, in hopes of physical AI speculation coming to fruition and a return to the all-time highs of December.

This content was originally published on http://Investing.com