This is a big year for Tesla as it seeks to deploy physical artificial intelligence applications, such as robots and robo-taxis.

Physical AI, smart machines that can interact in the real world, isn’t the only reason it’s a big year for the electric vehicle maker. It could be the year of convergence—when Elon Musk’s companies strengthen ties.

Musk, the richest person on the planet, controls Tesla, xAI, and SpaceX, along with a handful of smaller companies. Tesla, of course, is publicly traded, valued at some $1.5 trillion. Privately held SpaceX was recently valued at around $800 billion and is on track for a 2026 initial public offering. Privately held xAI, with X and its Grok chatbot, builds AI models and is valued at about $200 billion.

Investors have long wondered whether Musk could somehow consolidate his far-flung empire under one roof, creating a kind of supertech conglomerate. It never felt likely, until now.

Morgan Stanley analyst Adam Jonas, who no longer covers Tesla stock for the brokerage, focusing on AI and robotics, recently wrote about the “embodied AI ecosystem,” based on his acronym DREAMS. D for data, R for robots, E for energy, A for AI, M for manufacturing, and S for space.

Creating physical AI needs smart computers, data to train them, the ability to make and run them, and the ability to connect them. The latter is the space part. All those are part of the “Musk-onomy,” a term Jonas coined to describe the Tesla CEO’s business empire.

Jonas isn’t predicting the convergence of Tesla, SpaceX, and xAI in 2026. Wedbush analyst Dan Ives, however, sees some form of cross-investment developing between the three, potentially catalyzed by the SpaceX IPO or an xAI capital raise.

(In November, a majority of Tesla shareholders voting approved a nonbinding measure to allow Tesla to invest in xAI.)

“Elon is now wartime CEO, and laser-focused on driving the most important year in Tesla’s history,” Ives told Barron’s. For him, “wartime” refers to the AI arms race among tech giants. “We believe the autonomous [vehicle] valuation is $1 trillion alone for Tesla, and this is now the beginning of Robotaxis, Optimus, and ultimately SpaceX, creating a new Musk ecosystem.”

Ives rates Tesla stock Buy and has a $600 price target for shares.

It’s a bold vision of the future that looks more likely than at any time in the past.

Tesla shares rose 0.9% to $448.96, while the S&P 500 and Dow Jones Industrial Average both rose about 0.2%. Coming into Monday trading, Tesla’s stock was down about 1% so far this year and up about 13% over the past 12 months.