This analysis was first published in SvD Näringsliv, in Swedish, on January 12th, 2026. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.
Elon Musk’s company xAI has bigger plans than generating inappropriate images of KD leader Ebba Busch. Now signs are emerging of a merger across Musk’s empire — with Tesla’s robots taking centre stage.
We were promised flying cars, but all we got were fake images of Sweden’s deputy prime minister in a bikini.
That is the mildly bizarre state of affairs for part of Elon Musk’s tech empire as we enter January 2026.
Just over two months ago, Musk sat in the podcast studio alongside Joe Rogan and hinted that Tesla would be unveiling a kind of flying car — “maybe before the year is out,” meaning 2025.
As is well known, that did not happen. Instead, another of Musk’s companies, xAI, found itself in hot water when its chatbot Grok began generating unwanted nude images of all manner of people, including Swedish government ministers. The service was subsequently restricted in an attempt to dampen the wave of criticism.
So the year has started a little chaotically for Musk. But he is unlikely to be losing sleep over it. The plan for his AI company — and his corporate empire overall — has nothing to do with AI-generated bikini images.
There is, however, some tidying up and change to attend to among his many companies, given everything else that has also happened so far this year. The first big news concerning Tesla was that they had been overtaken by competitor BYD, which is now the world’s largest seller of electric vehicles. For xAI, some financial figures leaked to Bloomberg, where it emerged that the AI company had spent a full 72 billion kronor during the first nine months of 2025.
On a somewhat better note, Elon Musk had a much-reported dinner with Donald Trump, which could suggest the political frostiness between them has thawed slightly. And space company SpaceX is rumoured to be heading for a stock market listing.
Most interesting is to look at both the ambitions and direction of Tesla and xAI specifically. The two companies under Musk’s control appear to be overlapping more and more. In materials obtained by Bloomberg, xAI told its investors that the goal is to build an autonomous AI system that could be used to control humanoid robots — like Tesla’s Optimus.
Tesla has received a great deal of attention for these robots, but it should be noted that they are one of many players in this market. China’s Unitree Robotics and South Korea’s Hyundai are two major competitors. The latter are also working with Google’s AI lab DeepMind to use their AI models to control the robots.
One might also wonder how Tesla’s ambitions in this area are actually progressing. In May last year, Musk said he expected to produce thousands of Optimus robots, and that they would be working in Tesla factories before the year was out. That plan was subsequently abandoned last summer.
xAI’s strategy raises some questions about how far Tesla has actually come when it comes to a functional, smart, AI-driven Optimus robot. To Tesla’s shareholders, Musk has said he believes the company can become the world’s most valuable company by a wide margin. They will not get there with electric cars alone.
Musk has therefore started talking more and more about self-driving cars and robots as new areas for Tesla to grow into. But if xAI — an entirely separate company — intends to be the brain behind Optimus, what does Tesla contribute beyond manufacturing the robots?
Tesla — like Apple with the iPhone — tends to talk about the advantages of what is called “vertical integration.” In simplified terms, this means that as a company you own many steps in a manufacturing process.
For both Tesla and Apple, this means producing both hardware and software, for example. Through that, they can create a type of experience that is difficult for others to compete with. For Tesla to outsource the robots’ “brain” to another company would therefore be unusual for them.
But there is a conceivable solution.
Everything therefore points towards a consolidation of Musk’s corporate empire. If Tesla wants to step back somewhat from ordinary electric vehicles in terms of positioning, the most logical move would be to acquire xAI. Ideally Musk would probably also like to bring SpaceX into this new corporate structure, but that would likely be too complicated.
At Tesla’s recent annual meeting, many shareholders expressed support for an investment in xAI. But why not merge them entirely? It would move Tesla faster towards robotics, give it a stronger position in the red-hot AI market — and retain Tesla’s strongest card: its stock market position with engaged shareholders who look past the enormous valuation.
Such a merger would bring robot manufacturing and AI development under the same roof. Elon Musk could then return to doing what he does better than anyone: selling the future to the stock market.
He has probably already forgotten the bikini images. They were just a minor blip on the curve for the new supercompany Musk wants to build.
