SpaceX says it has agreement to acquire Cursor for $60B
twitter.com
twitter.com
If strike date comes and Cursor is in fact worth less than $60B... they can move to acquire it for that price. Or just let it "expire". And if it's worth more, they get a savage good deal. If the services were worth $8B anyway, it's hard to lose.
It seems less crazy to me through this lens. A straight acquisition, today, at $60B would in fact be crazy.
SpaceX spending $1B a month on various AI services seems ~plausible
(EDIT - Or maybe it's an IP transfer, or maybe it's over a longer time horizon. Idk but SpaceX clearly expects value from 'our work together' even if they don't exercise.)
And on the AI development side they're the ones providing compute in the form of a "million H100 equivalent Colossus training supercomputer"... On top of the cash.
I didn't say it was Wise.
I said it seems within possibility for this, very particular, corporation.
But I agree that it's hard to articulate what Cursor services you could blow this much money on.
Maybe it is all just an option! Or maybe they get a bunch of IP either way?
The main frenzy with Cursor started when you could access Anthropic models practically for free.
Otherwise it is just VS Code.
This is a bit simplistic. It's the VS Code that everyone used before cc came to town. Real devs, on real projects. All that data they collected is worth a lot more than "just vscode". Their composer2 is better than kimi2.5 and it's just a finetune on that data.
xAI had a decent model in grok4 (it was even sota on a bunch of benchmarks for a few weeks), but they didn't have great coding models (code-fast was ok-ish but nothing to write home about, certainly nowhere near SotA). Now that they've been banned from using claude, they'll get their expertise + data to build a coding model on top of whatever grok5 will be + their cluster for compute.
It doesn't sound like a bad plan to me, financial shenanigans or not.
> If you enable “Privacy Mode” in Cursor’s settings: zero data retention will be enabled for our model providers. Cursor may store some code data to provide extra features. None of your code will ever be trained on by us or any third-party.
Note the "may store some code data" and "none of your code will ever be trained on". In general you never want to include actual customer code in training the data, because of leaks that you may not want. Say someone has a hash somewhere, and your model autocompletes that hash. Bad. But that's not to say you couldn't train a reward model on pairs of prompts + completions. You have "some code data" (which could be acceptance rate) and use that. You just need to store the acceptance rate. And later, when you train new models, you check against that reward model. Does my new model reply close enough to score higher? If so, you're going in the right direction.
> If you choose to turn off “Privacy Mode”: we may use and store codebase data, prompts, editor actions, code snippets, and other code data and actions to improve our AI features and train our models.
Self explainatory.
> Even if you use your API key, your requests will still go through our backend!
They are collecting data even if you BYOK.
> If you choose to index your codebase, Cursor will upload your codebase in small chunks to our server to compute embeddings, but all plaintext code for computing embeddings ceases to exist after the life of the request. The embeddings and metadata about your codebase (hashes, file names) may be stored in our database.
They don't store (nor need to store) plain text, but they may store embeddings and metadata. Again, you can use those to train other things, not necessarily models. You can use metadata to check if you're going in the right direction.
Cursor needs their own 1st party backend model.
Sounds like a match made in heaven.
OpenAI tried to acquire Windsurf last year for $3B and couldn't.
1) A gamble based on cursor's compute constraint 2) if 1) plays out, he can purchase cursor via shares of spaceX over valued shares, at a fixed price should the valuation increase.
Wild conjecture.
Trading billions worth of idle compute, in exchange for a high-strike call option on the #3 player in the most-promising-vertical for AI, plus (presmuably) some access to their data, starts to sound like not a bad trade. Especially if you're pre-committed to betting your entire rocket company on winning in AI, and you're currently in sixth or seventh place.
SpaceX has invested a small amount as a share of its value in XAI, and could survive the loss of its investment.
The cluster’s already paid for, so likely in the $2B range for operating cash needs. Not more than $5.
If I imagine bringing in Cursor’s team to build a frontier model, ideally combined with Grok, which has one of the few truly proprietary data feeds available to it, and with a much larger custom model Cursor can solidify a place, and I get to do a stock swap to buy it, this sounds like a bet worth making.
Upshot - I bet there’s an MS/oAI deal on IP on the back of this; meanwhile the cluster goes brrr.
not that it isn't wild regardless
I am starting to see some potential in moving back away from pure terminal, a mixed modality with AI. But it is not in the direction of IDE in any traditional sense.
I'd even go so far as to say that any competitors that are direct (windsurf, kiro, etc.) aren't even in the same universe. Cursor is just so much better, faster, has better features (plan and debug mode), and squeezes much better results/code out of the same models. They absolutely have some secrete sauce that the other options just don't have.
So for me it’s more of a data deal - Elon buying himself some insight into codebases and real dev usage patterns? Oh finally someone to use his dirty data centres
Cursor has 1B in enterprise revenue. It doesn't matter if people can clone their product, those deals don't move slowly
That' all well and good and they had astounding growth rates but doesn't mean much. And 1B in ARR is not _that_ much in comparison. Also, reportedly they spend all their revenue and they have no control over the spend-side. The models they use will very likely get much more expensive. All the foundation model companies have a competing product. Cursor has the first mover advantage, but that will only help then so much. There have been plenty companies who grew fast, had huge revenue, but failed in the end, because they never got profitable. That's also in the cards for Cursor, if they don't fundamentally change their business model
That said, people are increasingly migrating to CLI tools (Claude Code if you like the Claude models, Pi Agent if you want something that's highly customizable, Crush if you want something fun), or GUI tools that are less code-first (Codex GUI).
Totally not for everybody though. I can see why some people would hate it.
And their price is so high because it's markup on API rates. API rates, even without markup, are just insanely irresponsible for anyone to be spending on full-time daily usage.
They are catching up fast!
https://www.businessinsider.com/chamath-palihapitiya-ai-cost...
https://x.com/chamath/status/2029634071966666964
I suspect that as the value a company provides is more than its code, then increasing code churn does not lead to an equivalent increase in revenue. Even for a tech company, a business' concept, connections, knowledge, assets, non-coding staff, etc.. are a significant value and increasing code doesn't increase the throughput of that value. For non-tech companies code is the grease in the gears, not the gears themselves.
You also neglect that products like Cursor run on two margins, their own plus the API provider’s. That’s always going to come at a premium
The rates without a margin of profit (or with a negative one) are not real.
If you think this of users who use cursor then I don’t think you’ve used cursor much at all.
Only the foundation model companies offer cheap/subsidized compute.
If you're an app layer company, you're offering a 10x worse deal to your customers.
Foundation model companies are willing to lose money to win loyalty. Remains to be seen if it'll work.
So no it’s not an oxymoron.
I’ve also seen it mentioned a lot of people having 2, 3 or even more subscriptions, which I’m pretty sure that can easily go South when it comes to costs.
But, again, and the most important point, I’ve never seen a detailed post on what people spend on this AI thing on a monthly basis (let’s say).
Cursor makes a ton of money because the product is great. It's easily the most sophisticated harness out there, and it isn't an IDE anymore. It's an agent dashboard since version 3.
Suffice it to say it's not all idiot money being thrown at them by users.
I do have Copilot in VSCode and Cursor.
I thought both should be equal in solving problems - turns out Cursor with the same model selected somehow was able to solve tasks that Copilot would get stuck or run in loops.
They have some tricks on managing file access that others don’t.
If you had a really good (big) local model, maybe it's an option, but on the more common smaller (<32b) models, it will have similar problems in looping, losing context, etc. in my experience.
It's a nice TUI, but the ecosystem is what makes it good.
true, but its not worth $60 billion fucking quid.
the whole thing is driven by irrational stock market investers who NEED ai to be the thing that saves the world.
they're betting everything on it.
At some point it can be valued as a high growth business, the code that backs it is almost irrelevant if the business is strong.
This. They are after the harness engineering experience of the Cursor people, I'd assume the they want to absorb all that into Grok's offerings.
The value and the room for innovation on the harness side seems to be underestimated.
Oddly the harness also affects model training, since even GLM/Z.ai for example train (I suspect) their model on the actual Claude Code harness. So the choises made by harness engineers affects the model. For Kimi/Moonshot and OpenAI the company makes their own harness. Alibaba uses Gemini.
Very interesting dynamics.
Earning millions that way is much more complicated.
It is surprisingly easy to do it once someone else has done the work. Increasingly that's the nature of AI-based software engineering: point it at an existing tool and ask it to carefully duplicate features until it has parity. As you pointed out, frontier LLM companies happen to be well positioned to sell the resulting products.
But if someone frames it "engineering talent that knows how to make LLMs even better at software development than competition" it might.
I see with my own work it works so it is not like Devin that was basically a scam that was valued at 10 billion.
In this kind of context yeah feels like it is quite possible to be worth 60 billion.
AI coding is much more than just the model - all the tools that human use in IDE are also useful for AI. Claude Code on the other hand just works with grep.
I thought it was a Windows thing. My Windows work computer is so heavily managed and monitored I assumed that was why Copilot stops being able to get terminal output or find the file I'm looking at. It's the same problem in IntelliJ and VSCode, with different models trying to find things in different ways.
Now that I think of it though, I've only used Copilot at work. At home I use Debian but I've never tried using Copilot. Claude, OpenCode, Gemini, and IntelliJ's AI Chat pointed at local Ollama models never have issues finding files or reading files and terminal output.
IDEs are made for just a human to interact with code. I think the paradigm of forcing these tools that weren’t built for this to do this, is us trying to fit a square peg in a round hole.
Call me old, but don’t put ai in my ide. My ide was made for a human, not an ai. For the established players for sure it makes sense since they already have space on our machines. But for the new ones imo terminal, or dedicated llm interfaces are where it’s at.
If I’m writing code sure suggest the next line. If the machine is writing code, let it, and just supervise properly. and have the proper interface that allows the strength of each
Also shameless plug, I wrote something about this very thing. https://khalah.medium.com/getting-ai-to-work-right-27b750dba...
The way I work now in the Codex desktop app is that I spin up 3-5 conversations which work in their dedicated git worktree.
So while the agent works and runs the test suite I can come back to other conversations to address blockers or do verification.
Important is that I can see which conversation has an update and getting desktop notifications.
Maybe I could set this up with tabs in the Terminal, but it does not sound like the best UX.
Claude is still gold standard if you're not in an IDE though.
Cursor both lets you highlight specific lines multiple times per chat and is much quicker at finding stuff.
I wouldn't think so. At work I have both cursor and claude code and while I use both, cursor is by far the most pleasant to use. If I had to give one up, I'd let claude go.
you've formed an opinion on the value of the company without knowing how many users it has? Kind of proves my point, no?Reminds me of the famous dropbox post: https://news.ycombinator.com/item?id=9224 - I don't even know if dropbox still exists in 2026 but i'm still happily using rsync and mailing things around because dropbox has just absolutely never worked reliably for me, unlike my 2007 gmail account.
Likewise, if it were up to me, instagram and any business whose business model revolves around ads would be banned (because ads would be banned because advertisement is harmful in general).
Unsure how it would work in practice.
Massive understatement calling it "a not particularly good plugin". If it were that simple there wouldn't be a need to even do this.
yes. plus $2b ARR, 1m DAU
What they want is the massive user base, the data (Cursor has a lot of high quality coding data for training), the teams expertise in coding models and agents, and the Composer models
60 billion is a large number but these frontier labs are burning billions a month in compute alone, and SpaceX is IPOing soon so they'll have a lot of cash to spend
I'd say that a million users is pretty good, but 350.000 paying users isn't, if you're a $60B company. Someone else mentioned that Anysphere has a $1B ARR, but I seriously doubt that each user is forking over ~$3000 per year.
Why do you doubt $3k/yr? Corporate usage skews a lot higher, when it's evaluated against hiring, not as a nice to have addon.
If $10k/yr means you get work done with one less hire that's an easy decision.
You mean Kimi K2.5? They can get that for free.
Elon/xAI want Grok to become useful for coding. Cursor has enough data and expertise to create a useful coding model. They found a price and an arrangement that made sense for both parties.
Add emotional hedges if needed but they are just emotional not financial.
Your argument is based on an assumption that cursor cannot lose value. Even if the market says it has.
No free lunch: an option is a bet for both sides. Zero sum.
This was a similar play for twitter by the same person
While an innovator at the time, today there are a lot of LLM coding solution, sold by model providers, model aggregators even open source ones , it’s not obvious what is being bought that isn’t a feature of vs code or one of the LLM agents ( as the dismissive saying goes )
Not happening
Downside is capped (cost of services + deal structure), upside is asymmetric if Cursor outperforms.
That said, these deals always hinge on whether the “$8B in services” is real economic value or just internal accounting. If it’s the latter, the risk profile looks very different.
* X will have a total of ~2GW of GPU sometime this year largely not doing much outside of 'grok is this true'
* despite no longer being in vogue with consumer devs Cursor still has a lot of developer data that can assist in building a model
* Cursor have decent enterprise relationships (while for xAI it is ~zero) and that's where the real revenue for llms + agents is
* Cursor are paying retail for tokens and competing against the frontier model co's who are also their suppliers. Not sustainable (hence their in-house composer model).
* Cursor the product covers the gamut from lovable-style prompt-to-app, an IDE, cli and bugbot
* X are using "x bucks" to pay for a potential later acquisition which are arguably overvalued based on the space x IPO hype
Option there to give X a window to make it work, otherwise walk away with a $10B breakup fee for access to it's data
However, one thing in AI is that while the usage goes up extremely quickly, it tends to go down just as fast. I know a lot of companies that are in the process of switching from Cursor to Claude Code, so in 6-12 months I'm not entirely sure of the data quality/quantity.
Also I think it is telling that they are calling them SpaceX not X. The X brand is absolutely toxic, especially in enterprise.
it might not help all that much once it turns into "grok" harness or otherwise associated with elon
I see two possibilities:
(1) SpaceX is paying with stock; and
(2) the $60bn pay-out is (a) conditional or (b) never going to be exercised—it was a stalking horse for negotiating the $10bn terms, which gives SpaceX everything it actually wants.
Also one would definitely offer to pay in stock if they believe it is massively over-valued lmao.
Sometimes it helps to go back to the basics to understand company performance: money in, money out?
Hey now, don't forget about it's super important other use, taking innocent photos of people and regenerating them in less clothing and compromising positions.
I'm sad that I even know that.
Maybe if this tech were completely secret and this was 1997, so a video of a naked Bill Clinton high-fiving Saddam Hussein in a hot tub was likely to shock the world, then it would be a big deal. But everyone knows all images (and especially surprising ones) are likely to be AI, I’m asking sincerely, does it really matter if people make fake photos for wanking purposes?
$60 billion seems expensive, but it gives them a much better chance at competing in the market than if they started their own harness from scratch.
Anthropic just tolerates the money losing developers who pay $20/$200 for subscriptions.
e.g. https://arstechnica.com/tech-policy/2022/12/twitter-stiffs-s...
I wouldn't trust a contract from one of Elon's companies unless they were willing to put in escrow an amount that would make me whole in case of a breach on their side. (And that amount would be quite large in the case of a potential breach involving using prompt data for training.)
e.g. Need developer data? Use some of that spare GPU compute, hand out free top end model coding access for a bit and you'll very rapidly have developer data
>decent enterprise relationships
I guess. 60B worth of "relationships" though?
They tried this - grok was free on openrouter for a while
I’m curious where you pull these stats from
xAI is not, and was not that bad, it's just everybody ignores it for anything serious due to obvious reasons.
“Cursor have” and “Cursor are” is awkward to read.
Is it in vogue with enterprise devs?
Their composer model is seriously good. I’ve been eyeing a cursor sub just to use it in OpenCode. They have a nice moat here.
> Cursor have decent enterprise relationships (while for xAI it is ~zero)
That has a reason. Those enterprise relationships are almost certainly going to sour at least a bit, if not for Musk‘s toxic image then for his erratic behavior.
It is true that they were not transparent about the base model that they used until the model slug was discovered by a Twitter user via the API.
[1]: https://arxiv.org/abs/2603.24477 [2]: https://cursor.com/blog/real-time-rl-for-composer
care to share more about this?
Hey...don't forget "grok is this person jewish(hint hint)"...or..just "grok do your thing"
Steal their Twitter usernames anyway, just like he did mine.
https://web.archive.org/web/20150822195811/twitter.com/valen...
https://twitter.com/valentine_
(If any lawyers read this and feel up for taking this on contingency, I don't think I'm difficult to contact.)
My account was hijacked via domain/DNS takeover around the time it was acquired by fElon (due to both Crazy Domains and Twitter support's incompetence — both parties removed 2FA from my accounts, even despite me telling Crazy Domains specifically never to do so). I managed to recover both accounts after kicking up a fuss, but the hijacker was midway through an 3rd party account wiping script, and I'd lost all my followers because of that.
I had 33,300+ tweets in 2015, and a lot of that was private interaction with friends.
https://fortune.com/2024/11/27/x-twitter-elon-musk-account-o...
A TOS isn’t some magical shield from legitimate complaints and scrutiny any more than “it’s the law” makes something morally right.
Also, comparing a TOS to a formal contract by two parties is a bit disingenuous. A classic “yes it’s technically true” situation. TOS’s are not treated the same way as a signed and dated formal contract. Not even by companies putting them up. They are lower stakes and often pages and pages of legalese that you also skip over at times.
Best I can do is pretend to be a lawyer and forward all of ur stuff to ChatGPT Free. U down?
This is digital feudalism, and the billionaires have seized the means of communication.
Digital decentralized protocols (smtp, http, etc) were the first time this wasn’t true. But you [we] voluntarily moved your communication off of open internet protocols onto private ad-based platforms.
Of course you don’t own anything there, you never did. The billionaires didn’t “seize” anything. You happily sold yourself out for a few clicks of less friction and an easier shot at digital fame by going “viral” on social media company land.
If this isn’t a much bigger indictment of the collective (who after decades still could not agree on a non-elitist, human understandable protocol that didn’t require a CS degree to use) than it is of the entrepreneurs who solved all the problems the collective refused to, I don’t know how else to get though to you.
Circa 2003
I guess I kinda see it... it makes sense from both points of view (xAI needs data + places to run their models, cursor needs to not be reliant on Anthropic/OpenAI).
I think I don't see it working out... I just don't see an Elon company sustaining a culture that leads to a high-quality AI lab, even with the data + compute.
I guess really depends on tastes
That being said, I noticed that Kimi being served through Openrouter providers was trash. Whatever they do on the backend to optimize for throughput really compromised the intelligence of the model. You have to work with Kimi directly if you want the best results, and that's also probably why they released a test suite to verify the intelligence of their new models.
I found it much more consistent than glm or minimax
Composer-2 seems very useful in Cursor, while K2.6 according to AA seems to be a really useful general model: https://artificialanalysis.ai/articles/kimi-k2-6-the-new-lea...
It was incredibly fast though, but that just meant it was writing buggy code at breakneck speed
Vibe coding in a nutshell
Anyone have recommendations? I like the plan/agent mode and the fact that it's an IDE, so I can use it in the traditional way as well as by yapping with a bunch of agents. Also the Cursor rules I've curated and they do their job well.
Thanks!
Claude code can be run against any model you want, you just simply need to update the ENV vars.
Or if you have Ollama running locally you can do something like this:
ollama launch claude --model glm-5:cloud
Or if you feel brave and want to turn your laptop into BBQ
ollama launch claude --model minimax:2.5
The 5 hour window sounds annoying for hobbyists who only use it time to time when they want to dive into some personal project.
Having an X/Twitter account is doing business with Elon. You could say only paid X accounts qualify for this, but I would imagine most brands have paid accounts.
YCombinator has an X account. I suspect the OP is already asking for his Hacker News account to be deleted.
Just curious, why do you hate elon so much?
Has that changed now?
But you can't actually sign up to Pro or Pro+; they disabled sign ups until the per token pricing starts.
I wouldn't jump to that ship.
Give the oracle at amp a go :) Our TUI is really nice as well. Get in touch for some credits.
Integrates a lot of agents (I use it with OpenRouter and directly with Pi) natively, is fast (you don't realise how laggy VSCode and its forks are).
Biggest disadvantage: lack of extensions. Lots of quality of life missing (e.g. gitignore integration to add/append gitignore files for different languages).
Similar to Cursor, open source, based on open code, compatible with claude code configuration and works with all providers.
Seems quite future proof to me and you can toggle between providers seemlesly
If value is a concern, Codex. It's pretty hard to beat those subsidies. If you really want model freedom, Copilot is surprisingly decent value and as of right now let's you use your sub in other harnesses like OpenCode.
When coding agents work they're great. When they don't I still need the IDE. They usually don't work that great when I'm working on something novel or brownfield. Which happens quite regularly.
But I definitely still want ai autocomplete. I'm not a Vim user. Coding isn't about typing for me, it's about solving problems. So a tool that does lots of the typing for me is a godsend.
So do I go for VS Code + Copilot? Because it was bad when I tried it again for a few days in November. Slow to respond and gave poor results. Cursor is snappy and gives useful results most of the time.
their own, called Zeta 2
and then Mercury by Inception. May also be available in VSCode through some third party extension like Kilo, not sure
Those are basically my only requirements, and it feels like I've tried everything and they're all everything only has 1 of those features. Zed is the closest, it technically has those features, they're just buggy and have provider specific quirks.
So I'm stuck on Cursor until Anthropic invents IDE technology, or at least VS Code wrapper technology.
No association with Jetbrains, and despite having a license, don't even use their AI support much myself (mostly using CC, with IDE integration for diff viewing). But if you haven't tried it recently, probably worth a revisit if you're open to Jetbrains products.
Maybe I was missing something, but I do not understand how it is worth sixty billion dollars.
I guess I don't really understand what it buys you over just running vanilla VS Code and Codex.
You can do that with claude code, github copilot (built into vs code) and codex, in any of their IDE versions, plugins for other ides (jetbrains, vscode, anything else you care to name) and also, of course, the CLI versions of all of them. They're also integrated into github, jira, and everything else.
Seriously, try other tools! if only to get a more balanced perspective.
This all being said, its been a long time since I last tried cursor... I'll give it a go.
I have, right now, a tmux session with Codex on the bottom and Neovim on the top. It does what I was doing in Cursor just fine.
I am not really “anti Cursor”, I just genuinely am confused as to what it actually buys me over the setup I just described.
* Perhaps could be solved with the right terminal software, but I like the GUI for seeing my running agents and viewing all my conversations
* Works with multiple model providers in the same tool. I probably worry about cost optimization more than my employer would care for me to, but I frequently switch between openai/anthropic and switch between model sizes to use the tool that I think can get the job done for the least money. Another thing I like is having a long conversation with an expensive model, then I can switch to 5.4-nano to cheaply extract some little piece of information or summary from the conversation. Really this is big being able to switch model providers throughout the months without having to change my interface.
* Good support for the various ways of providing context. Rules, AGENTs.MD/CLAUDE.md files (if you want it to automatically read those), skills. Good hook support.
* I think the agent diff review experience is pretty good, but maybe it works similarly when you hook the cli agents into an editor, IDK.
* The default shell sandbox behavior is quite good. Every shell command runs in some sort of sandbox so that read only commands work without approval. The model asks for more permissions when it tries to do something that needs more permissions like network access or writing outside of the workspace directory. I know Claude code has a similar feature you can use.
* Good fork / revert conversation to checkpoints, with the option of reverting the code or just reverting the conversation.
* Feels decent that I am an API customer through Cursor. I don't hit Claude limits. Cursor doesn't have an incentive to limit reasoning or token usage, although they do have an opposite incentive.
* They are reasonably responsive to bugs and feature requests through their forum.
* Works well with a lot of repos / folders added to your workspace. I probably should organize all my stuff under a single directory, but alas I have like 8 different folders added to my workspace and it handles this well. Perhaps Claude --add-dir support works fine too.
DOWNSIDES:
* They are not quickly adding the best open source models to Cursor. Like Kimi 2.6 or whatever. Possibly not incentivized to given their Composer models.
* Don't love the subagent support. I can define custom subagents although it is not easy to get models to use mine instead of the builtin ones. The builtin ones do not allow me to control what model they run, so they will always run something like composer-2-fast, which is a fine model for all I know, but I would like to control it. Also, I would like if you could optionally make the subagent experience more first class. Like browse all the subagents and continue conversations with them or switch their model etc, although that is probably tricky / weird.
As far as I know, xAI’s enterprise market share is non-existent. This is their way to get some much needed customers.
When they could instead sign with the new hottest enterprise coding IDE (Claude, Codex, etc who are way more popular now). Maybe if it’s an acquihire, it’s the GTM/Sales that xAI is after?
A fleet of special ships for orbital commute and future generation Optimus, no doubt.
OR - they follow the same approach as the current fleet of Starlink satellites. Probably have some redundancy baked in (eg 10 operational GPUs with 3 backup). They have rich data around hardware expectancy in space. Can’t hurt to have that for simulations.
Note that Meta paid ~16b for Alexandr Wang, and Google paid ~3b for the windsurf executive team. You are making a category error -- the talent pool isn't "ML researcher" it's "competent leader"
The AI bubble music stops when one of these former-darling companies has a complete crashout rather than a "successful exit". The investors keep investing because even largely-failed products get acquihire paydays
They’re buying the customers and the brand.
What you might pay for is market signal + model distribution. Grok needs a story for why enterprises should switch. "The model that powers the tool you already use every day" is a much easier enterprise sales pitch than "our LLM benchmarks slightly better." The $60B is at least partially buying the answer to the question: why should any company bet on xAI?
EDIT: Parent commenter edited out the @dang from their comment making mine appear to be responding to something not in their comment.
And xAI now gets 10B of more revenue on their income statement.
Perfect financial statement boosting for the IPO which in turn will pay back these costs.
At least that’s the bet.
If so that would seem like the most plausible take on why this is happening.
Well, I said no. Not getting burned that way again!
The thing is, every dollar you spend on insurance is a dollar (and its interest) you lose. Furthermore, we don't know when it will pop. 1 year? 5 years?
The more reasonable solution is probably gradually reduce exposure to US markets by selling SP500 shares and turning to Europe and emerging markets ETFs. No need to cash out 401k.
If you just look at the past 20 years, the US has had exceptional returns compared to the rest of the world.
The thing is, historically, high PE ratios like what we're seeing in the US do not correlate with short term returns that are as high. Expected future returns decrease as the PE ratios go up in a pretty linear fashion.
https://am.jpmorgan.com/us/en/asset-management/institutional...
If you want a different point to backtest from, try Japan in the 80s and early 90s
I'm trying to help my parents now their at retirement age and am seeing first hand what not planning for your future looks like. They hit retirement with nothing but a small social security check every month. Not even enough to cover rent in most places.
I don't know how much you have in your 401k, but it will be worth literally hundreds of thousands more if you pull it out when you retire. You aren't just paying the penalties now, you're paying for potentially decades of compounding.
But if by some tragedy you don't die young, your older self is gonna be pissed at younger you for costing him hundreds of thousands of dollars.
I'm not an expert but it looks to my like 80% of my allocation won't be tracking spacex, because it's mid cap or small cap etc, and the 20% that's in the vanguard growth index might? I assume whoever sets the rules for the fund could change the rules to say companies must be listed for X months if they want to avoid this, right?
And I can change my allocation.
edit: Actually wait, isn't it only nasdaq 100 that's tracking it early, after 15 days rather than 3 months of trading? So 0% of my 401k is exposed to buying it quickly after IPO already, I think.
I do agree that the optics of this aren’t great, and it’s rather easy to be cynical about motives.
They removed it largely because investors wanted higher returns, and the tech companies that had such dual classes (1) were doing really well, and the S&P ended up caving on that rule.
1: Perennial hot button around here Palantir did this in a more extreme fashion than most. The three founders F class shares will always be at 49.9999% of the votes and the early investors B class shares have 10 votes each as compared to the publicly traded A class shares 1 votes.
S&P 500 includes companies from multiple exchanges. Like Nvidia, which lists on Nasdaq.
https://www.morningstar.com/funds/spacex-ipo-how-index-funds...
> Nasdaq was the first to consider a rule change that would grant mega IPOs like SpaceX early admission to its flagship Nasdaq-100 index. The exchange and index provider began a consultation period in February to assess the viability of and industry response to a proposed “fast entry” rule. The change was approved on March 30 and will be effective on May 1.
This type of bundling is just what conglomerates do. Is it a good thing? Not really. Many investors also hate this kind of stuff and avoid investing in these types of companies.
You should learn about securitizations. It’s actually interesting. But people talk about it colloquially and so incorrectly that it’s mind dumbing.
Here’s a simplified example of how you can take something and turn it into a safe investment:
Suppose you have 10 loans and each has a 50% chance of default. Ignore coupon, and say they are $10 each. Expected value is $50
If you were to put this in a deal and cut it up into tranches, say the first tranche gets the first $10, this would be your AAA bond because odds of getting paid out you $10 would be > 99.9%. The equity (bottom tranches) would pay a lot less. For instance the expected value of the bottom half would be considerably less than $50 that is being promised. So there’s upside since you’ll be paying cents on the dollar and even though in the median scenario you’re making nothing, you have to weight the expected values of each scenario to figure out how to price it.
The problem w this model is that it only works if assets are relatively uncorrelated which wasn’t true (it was true in the past but ignored systematic risk and adverse selection in originations).
What this has to do w musk or spacex I’m still not sure
I think you meant "the chances of getting paid", not of not getting paid.
What this has to do with with SpaceX is that there's the same blatant disregard for sound financial analysis by the very institutions that were/are supposed to know better. The NASDAQ 100 fast track decision is a similar level of financial malpractice as the ratings agencies slapping AAA on things that they knew were little better than junk. The abuses of the subprime mortgage originators were well known long before the actual meltdown. As were those systemic risks you spoke of. They were ignored by those whose entire job it was to not ignore them, and they sold out their credibility for a quick buck. If you can't see the similarities to the present situation then I can only wish you luck.
What you've described is how the base level mortgage-backed securities (MBSs) work. The tranches work because there actually exist mortgages that are at lower default risk (high home equity, well qualified borrowers, etc.), and the senior tranches are effective in capturing their underlying safety. What CDOs did was to take the lower, riskier tranches of MBSs from various sources and repackage them and divided them into tranches again. Then they got the ratings agencies to rate the top tranches of the CDOs as AAA as well. It's as if a teacher graded several classes and then took everyone that got a C or below from all the classes and then graded them on a curve again. And suddenly a lot of the C students became A students. It was outright financial insanity. Well, mixing a rocket/satellite company with a couple of also-ran AI outfits and the walking corpse of Twitter, and then calling the whole thing SpaceX and valued at $1.75T is a similarly level of financial insanity to me.
Mortgages are very cuspy. It's pretty wild that someone would give you a 30 year loan with 20% equity for a few percent higher than risk free. Also you could default on that loan and they can't garnish your wages. And if you default, your credit history would reset after 7 years. Oh and you can repay the loan at no cost, so if rates go down you can just pay it back and turn around and get another loan at a lower rate, or if rates go up you can hold on to it until 30 years.
It's the same thing with CDOs. You take something that has some undesirable characteristics (these cuspy BBB), structure it in such a way to create some safe and riskier assets. And hopefully the sum of the final tranches is worth more than the components.
It's like if you were forced to sell an animal whole. The individual components are worth more because people have different preferences. With CDOs (excluding synthetic), the amount of exposure is unchanged. It's a bit more concentrated where the riskiest parts are in these CDOs, but nothing changes.
I get that finance isn't really sexy and people see it as just pushing paper around, not creating any value. But there's real value in taking some components and creating something more valuable with it. It's like using flour + sugar + egg to create cookies worth a lot more than the individual components. There was fraud and negligence but people are mad at the wrong things.
Rating agencies did a poor job, but in their defense, delinquencies and defaults reached levels well outside expected values due to systematic risks. Also rating agencies are kind of a joke. Investors aren't dumb. Even today, look at debt, there's a big difference between bonds of the same rating and similar weighted average life.
The bad thing about rating agencies is how regulations rely on them to determine what "safe" is and capital requirements. Of course, mandated capital requirements shouldn't be the end all be all of risk management, but these guidelines that over rely on rating agencies don't help the matter.
Mixing rocket company with AI and social media is fine. It's just a conglomerate. Who cares? Look at Samsung, they sell smartphones, TVs, ships, they're involved in construction, even insurance and biotech.
The question is what is the underlying core competency they're relying on and it's obviously Musk. And he has been able to deliver innovative products (manufacturing and forward thinking technologies). He scaled up one of the largest training clusters in the world in a very short period of time. He created a large car company after decades of stagnation. He lowered cost of getting stuff to orbit by orders of magnitude and now handles something like 90% of rocket launches. He's gotta be doing something, right?
And that naive statistical reasoning is where it goes terribly wrong. You have to consider the causal process that generates that distribution!
The type of people who would default on a coinflip are extremely sensitive to how the economy changes. The probabilities are very correlated, the expected value is rather meaningless then. It's closer to having a 50% chance to either get a full return or get zero returns, depending the macroeconomy, quite the gamble. Actually, those people were in a rather dodgy situation in the first place, or are not great at decision-making, so it might be more like 50% chance either of getting 50% return or getting 0% return.
PS: Just elaborating on your point, not meant as a counterargument, I know you said the same thing.
Google and others were sitting at the corner, laughing that they gonna burn their money for no reason! they turned out to be wrong.
Turns out offering discounted/subsized tokens to developers massively improves your AI compared to just being a talking parrot for normal user workflow where you do not get "instant feedback" on if it worked or not.
Now why is this bad? Well, if you invest in a fund that is based off of the indices, you’re going to be investing in SpaceX whether you want to or not and I certainly don’t think 15 days is enough time to sus out whether this is a stable investment worthy of being in the index, but it’ll be great…until it drags a million retirement funds down with it.
I know a ton of people that use Codex, Claude, OpenCode but can't name a single person that uses Cursor or Grok that is knee deep into agentic coding.
This news is very off-putting though. I will definitely not be renewing. I don't want to be associated with Musk in any way.
I feel like we're finally at a point where you don't have to constantly argue with and constantly babysit coding models, which makes it even more frustrating when you're suddenly forced to deal with one that ignores your instructions and gets stuck in thinking loops again.
I suspect it's the vast troves of training data rather than any tech that Cursor possesses that SpaceX is after...
But I just... barely use an IDE anymore. I think I have the lowest possible subscription price for "all products" you can have (at least as an outsider) and I think I'm going to cancel this year. I've been paying for a decade+
Not sure what problems people here have with JetBrains offerings
Honestly unlimited codex with 5.4 high has a similar effect.
SOTA models + harnesses used together is very different than it was 6 months ago. People that have significant software engineering experience can get so much done it's scary.
I do not need to "shift my perspective" since I do use agents to the degree that I need and it helps help me very much. I am way more productive with them.
Generated code is still not perfect disregarding of any particular model (I have access to all). I have to watch and fix, sometimes by supplying more precise specs, sometimes asking to rewrite piece of code in such and such manner using this and that structures.
I keep seeing what I'm referring to happen - folks are using / opening their editor less and less.
What's crazy is a developer can go on a walk and use tmux/tailscale and keep working as if they were sitting at their desk.
We hit some sort of tipping point between models and harnesses and people learning how to use the tools idk.
And directs / engineers / friends seem happier.
Simon Wilson recently did a podcast where he discussed his experience and it felt very familiar.
Worth listening (ignore the click bait title) https://www.youtube.com/watch?v=wc8FBhQtdsA
Not sure what problems people here have with JetBrains offerings
I know JetBrain product could be sluggish on "normal" computers however all 4 of my development machines run on 16 cores AMD with 128GB RAM. It flies in environments like that
Yet JetBrains tried to do everything themselves and failed :(
I think they’ve been caught in a bad spot. They’re a profitable company, but nowhere on the scale of Microsoft. And they don’t have billions of VC to effectively price dump. Other tools that can focus on one thing and burn cash are advancing quickly and some of them don’t really need an IDE at all.
The semi-recent introduction of ACP integration in the JetBrains IDEs has been a nice bridge. But now it’s confusing how everything comes together. I really hope they can survive.
A controlled environment to determine effort and token usage, and to get plenty of exclusive training on code.
It could end up making sense. Idk if they needed to offer 60B though.
The problem is they can't compete with Anthropic and OpenAI because they can't sell Opus and GPT at a discount to subscribers like OpenAI and Anthropic do with their subscriptions.
So they either need to build a competing model or slowly die.
Cursor is essentially all the Claude Code products but without the horrible bugs of Claude Code products.
You can transfer from CLI to web and it actually works.
I think Gemini is best model out there, and it's not Cursor who you should praise. I use it with jetbrains junie. Vastly cheaper than claude, faster, produces better quality code, actually listens to your instructions, more accurate. I'm sure claude code cli has some cli magic that I'm missing out on, but having everything just work in a nice IDE (and llm to actually understand your symbol table) is like magic.
IDK how Junie does it, but I spend less than $50 USD per month and I'm on it 30 hours per week.
But it's clearly not worth 60B dollars in April 2026.
More accurately it is 3.4% of SpaceX at the last rumored valuation of $1.75T.
This is actually an amazing sweetheart deal for Cursor. Many times with these high profile acquisitions, most stock is tied to LPA's and employment at the company, and also earnout provisions. The company then finds a way to parachute them out early, which both voids the earnout and their employment, thus they never vest most of the units and the few units they do vest get bought out at 409A valuations which are typically much, much lower.
In the case of Cursor this is an amazing boon as SpaceX listed at an almost 100x multiple which is absolutely staggering. Had SpaceX stayed private they could have 409a'd Cursor and got it for effectively ~100M$ cash.
Not just OpenAI, but OpenAI and OpenAI[1].
for contrast, Elon paid $44b for twitter back in 2022. When you adjust for inflation, Twitter was acquired for $49b in 2026 money. Cursor getting bought for 1.22x more is just insanity.
Elon seems unwilling to shake off the image that he has basically no idea what he's doing.
> Nikita Bier @nikitabier
>
> If you’re seeing a bunch of Japanese posts, here are some fun facts:
> Japan has more daily active users and more time spent on X than any other country in the world.
> Over two thirds of the country is monthly active on X.
> X in Japan has one of the highest penetration rates of any social network in history.
1: https://twitter.com/nikitabier/status/2037764895064867061
But in this specific context it's even crazier. It's one think to break contact with a parent but I think it's hard to imagine doing so when said parent is extremely rich (just because of both the privilege it gives, but also the risk of reprimand), even more so when they are the richest person on Earth.
in ten the speed'll kick in, can of coke and a ciggy and he'll be right as rain
Elon is problematic in many ways and despite the cool things his companies do, I think he is also causing harm. However, he is not an idiot, he is very business savvy, he does things for real reasons, and if you're going to speculate that he's being an idiot and making a stupid decision, then I think it needs an argument of substance that actually understands the factors at play in spending billions of dollars on buying a company. Which I don't think either of us are equipped to provide.
Saying "this doesn't make sense" is basically an admission that it isn't understood, rather than evidence that Elon is being an idiot.
I do agree wealth does cause brain rot and even the people trying to be most self-aware about it still fall victim to their bubbles and egos. I think Elon shows this plenty is many aspects of his life, but business is not one of them.
I have no idea what this has to do with aerospace, but I know a bit about software and this does not look great. Cursor is obviously on a serious decline and has little to no moat in the area they are building in (IDE), which we kinda now know is maybe not even the right area (CLI). I feel like this is just a bad move?
That already happened with xAI-X merged with SpaceX.
SpaceX is no longer SpaceX per se, but SpaceX-xAI.
My TL; DR (and this is mine, personally) is its mission has pivoted from colonising Mars to building a Dyson sphere. Space-based datacentres are a demand excuse for putting lots of solar panels in space. Going one level down, more Cursor use is a demand excuse for putting lots of datacentres anywhere.
My point is regardless of what you think of a Dyson sphere, this theory seems to predict what the company does better than assuming everything's a ketamine fever dream.
I think Musk being a ketamine addict explains a lot and this is very aligned. Given that he can't build a self-driving car, he would have to be under the influence of very strong drugs to think he could build a Dyson sphere of all things.
That being said, some sort of financial fraud is even more on brand.
The characterisation of “level 5” autonomy as the car handling any conceivable circumstance (not that you explicitly made this claim here) is just silly. Humans can’t handle any conceivable circumstance either.
Be it the Dyson shell thing or Lunar or Mars colonies, there's no way it'll be done relying on transports from Earth surface. It could only work if we could make them from asteroid pieces. Which makes most items on their tech tree from Starship forward obsolete. And they're already all-in on those techs. It makes so little sense in so many levels.
Sure. My question was why. And my loose interrogation of the question, together with some unique domain expertise, suggests he found an excuse to work towards a Dyson sphere.
Obligatory mention: https://www.youtube.com/watch?v=fLzEX1TPBFM
Cursor's token utilization is significantly better than Claude Code. Composer's latest model, for coding, is very competitive on quality given price and was clearly well-optmiized (in two months, you will hear almost nothing else than how expensive Anthropic is...this is before they try to release the really expensive models). so many very obvious things like this if you have been using this tech every day for multiple years.
unfortunately, the competition in this space is very weak because of how dominant cursor has been (Kilo/Roo/Cline all have major implementation issues with token utilization, everyone else is trying to go all in on agentic). don't see this getting better until things get much worse because of anthropic/agentic. from the decisions that anthropic is making, it seems they are busily digging their own grave. growth will come after this.
A team could build an AI IDE in a week, this could be a race to the bottom
But, even if you want a big all-in-one editor in an Electron app, it seems obvious VS Code is the way to go (or Zed, if you you aren't committed to using an Electron app). I just can't think of anything Cursor offers that makes it worth spending extra money for it.
Tesla's the odd one out: it's public but it's still in there, although Musk would probably prefer it to be private too.
We're probably looking at nuclear fission generators to get started, then converting to geothermal at any appreciable (and maybe fusion, inshallah).
That’s SpaceX’s version of Tesla’s self driving car pipe dream
Edit - I use self-driving car and Autopilot interchangeably
What I see a lot of people do, unfortunately, is reconcile this contradiction by not following the published limitations of the "Full Self-Driving (Supervised)" product. They assume that Elon Musk wouldn't call it that if it couldn't be trusted to do what they expect. Then they get into fatal crashes, and someone sues, and Tesla argues that they can't be held accountable for bad drivers who don't follow the rules.
Any argument about how people don't pay enough attention since it isn't yet certified as a L4 system is irrelevant and tangential to the point.
5 million over 5 years capex+opex. Mostly opex
It's also a troll post
No, having the option to replace technology at your leisure would be a benefit. Being forced to replace your technology because it's destined to become aerosolized aluminum in less than five years is a detriment.
What's the point of the except?
The main problem is the AI stuff.
I don’t personally think Google is worth $4T but the share price says otherwise.
Source?
https://www.morningstar.com/funds/spacex-ipo-how-index-funds...
> S&P is reportedly considering a fast entry rule change to its flagship index, though it has not yet been approved, and details are scant.
> FTSE Russell is also considering a fast entry rule for its suite of US market indexes and is in a consultation period as of early April 2026.
Only Nasdaq 100 has changed its rules, but Nasdaq 100 is not (and should not be) in most retirement funds.
Really? We're still making claims like this in the year of our Lord 2026? People in the markets today are not predicting the real value of a company, they're gambling that the various political and financial machinations from people like Elon Musk will increase the share price enough that they can sell at a profit. The value of shares like Tesla are utterly disconnected from the value of the underlying business.
I'm not saying they aren't profitable. I don't know, but it's definitely not a given.
We know how much was spent by Xai too.
You can wait for Godot if you wish.
You may not have noticed because positive Musk related news doesn't seem to make headlines anymore.
You’re not wrong factually, but it doesn’t mean what you’re suggesting it means. Their share went up because EVs aren’t selling as much anymore. All companies including Tesla are selling fewer EVs. They just have a bigger share of the smaller pie, which isn’t exactly a success when you only sell EVs, but your competitors also sell non EVs.
Edit: Constant is the wrong word. Resilient or consistent is what I was trying to say.
Competitors leaving the market means less competition which is a good thing for Tesla. If the market for EVs returns in the future (if, say, the next administration reimplements the incentives), Tesla will be there to reap the benefits.
Their sales did not remain constant.
That’s just money in the door and the underwriters seem to think the business is worth $1.75T.
Again, not debating that SpaceX isn’t a legit company or that it’s profitable. But underwriters agreeing with high valuations to stocks that collapse once they go public isn’t unheard of.
Edit: and I will concede that I should’ve phrased my initial thoughts better. Credit rating agencies and underwriters do very separate things, just like IPOs and MBS are two very separate things.
That isn't what is happening at all.
In an IPO the underwriters and the company collaborate to set the price based on approximate demand and what they want the quality of the holders to look like.
In the roadshow, the company is very constrained as to what they can say or disclose outside of the scope of the S-1. They can't include MNPI, forward looking financial projections, etc. Underwriters are also prohibited from sharing MNPI, or publishing marketing disguised as research.
So I guess if you're saying the SpaceX S-1 is completely full of shit and there's hidden risk in it, than it could be similar to 2008, but in this case nobody is manufacturing a rating, and those material misrepresentations would constitute securities fraud. Investment banks and ratings agencies aren't the same thing at all, and the buyers of marginally profitable IPO stocks are (hopefully) different than those of AAA MBS.
I agree underwriters and credit agencies are very different just like IPOs and MBS are very different. I don’t think SpaceX is committing fraud.
> That’s just money in the door and the underwriters that seem to think the business is worth $1.75T.
I was responding to this particular comment.
In 2008, the credit rating agencies weren’t necessarily found to be guilty of wrongdoing, but a variety of reasons let them roll with AAA ratings on junk MBS anyway. Similarly the underwriters are not going to be committing crimes to facilitate IPOs. They are after all taking the risk of guaranteeing the sale for the company. However, if a company wants to roll with a high valuation, even if the fundamentals aren’t matching the valuation, if there are buyers, the underwriters will set the price supporting that high valuation. They are not incentivized to accurately measure a company’s worth like the comment I was responding to suggests.
Did you notice the size of the Artemis rocket and the size of the payload it sends to the moon and back?
Do you expect there to be diamonds just laying these on the moon surface, no mining required.
I think you're going to be surprised at the level of competition BO provides SpaceX in the Artemis program.
They are only profitable because of subsidies. Pretty much 1:1.
Laugh all you want. He may have the last laugh on this one.
Since the firing of several Grok founders, Grok has decreased in capabilities. It is illogical and insults users when called out.
So he does what everyone does. Write more dev tools, slap a price on it and hope retail investors will be impressed in the IPO. The $60 billion is of course optional and will just be used in the IPO to inflate the valuation.
How is a VSCode fork and a open weight LLM fine-tune worth $60B?
One would think Elon would learn his lesson after overpaying for Twitter and then having to merge his failures together to stay afloat. But no, more cash into the burning pile.
Ignoring future business ideas, Cursor reported reached $2 billion+ annualized revenue run rate in 2026, doubling from 2025. Recent financing rounds reached high-end valuation between $30 billion and $50 billion.
because they already have VSCode or IntelliJ for edits
Codex is still going strong but it’s hard to imagine they won’t do similar eventually.
So now im honestly hearing a lot more folk stick it out with cursor while waiting for the dust to settle.
A lot of enterprises use Github Copilot which has per-request pricing model which effectively means unlimited tokens which eliminates this issue.
The harness receives a response, has to parse out the tool call, execute it and then start a new request with the tool call result.
Nope, not unless you are doing steering.
Each new prompt = new request, but tool calls don't count.
Cursor also has a very nice integrated DX that I miss in Claude's VSCode plugin.
If you give me a billion, I can do an annualized revenue run rate of ~$12 billion just by selling a dollar for 99 cents.
We're losing money on every unit, but we'll make up for it in volume.
Things are moving so fast, and these companies have no moat whatsoever. Purchasing a company for 30x annual revenue (and as others have pointed out, how much of this revenue goes straight to companies like Anthropic?), without knowing if it's even going to exist in 3-5 years, seems bonkers.
I mean, congratulations to the founders on becoming billionaires in record time, but this is uncharted territory.
maybe he's getting value from this? (also the deal was essentially secured with Tesla stock, so who knows what did he actually pay)
1. It's cheap to run.
2. It has clear advantages over existing technology (SMS).
3. My mom uses it. She's never going to use cursor. Whatsapp had a huge userbase in Europe. Basically everyone I know uses it.
And it was "only" ~$20 billion. Inflation can't be this high.
While I'm not sure about this buy, Cursor does at least have revenue. WhatsApp was basically running on VC/private money (they had an extremely nominal fee, but I never had to pay it), and was sold to buy its userbase into the Facebook fold. I don't think you can compare that to a business that at least has some decent revenue.
I wish people would stop talking about just revenue. It's mostly meaningless without knowing their expenses.
Also revenue is a signal for product market fit. Is it a great one? Dunno. But for example I'd be hard pressed to sell $1billion of anything, even if I had something everyone wanted.
But I think your point about burn rate is important. How long can they have this attrition on cash before they collapse?
Their main product is part VSCode, which is a market that's almost impossible to make money in, and part reselling already expensive LLM tokens.
You can look at more parameters and judge how well a company could do in the future. For Amazon, you can predict that once they stop growing, they can make a pretty penny.
But with Cursor that doesn't seem likely. Even if they had the talent for training models from scratch, which I don't think they do, and IF inference makes money, which is not clear at all, training models is still a huge money sink.
So, for them getting bought out by xAi which has a base model they can use makes sense. But what does xAi get here? Another endless money pit?
whether that actually gets them ahead, that's another question....
I think the truth is that it's a new frontier. No one knows if any of this will make money. Investors are just betting that someone else will learn to monetize sometime soon.
The value in acquisitions for investors typically comes from how much money is locked into multi-year deals. A lot of tech folks in leadership positions that I talk to are very aware that the best option in this space changes every 2 months. Right now it's Claude. Next month it might be Codex. A couple months after that it could be Gemini/Qwen/Composor/Kimi/xAI.
Locking in with Cursor where quick swapping your team between the changing options is the point is a better choice than locking in even a 1 year deal with any single option where you're still going to be paying for token cost on top of it.
The cost of switching from cursor to codex or Claude code is minimal.
So what does Claude code actually have that spaceX can't imitate? Well, not much, but acquiring hot companies before your IPO is a good strategy to drive up your own valuation.
This deal is different: SpaceX is heading for an IPO which is now complicated by xAI becoming a subsidiary. Cursor is actually popular and I’m sure this is all stock-based so as long as investors believe that those users stick to xAI it’ll juice the entire SpaceX IPO. I am skeptical but these days the market seems to be driven by a country-club full of guys in Connecticut who are constantly hyperventilating on X so maybe from that angle it’s just another way he’s getting what he wanted from Twitter.
Biden won in 2020 with just ~$2 billion. Though he didn't get all the branches.
Neither did Obama, who won two terms for <$2 billion.
Are the house and courts really so expensive?
Cursor is installed on a LOT of computers.
Once Grok becomes the default engine, it will raise adoption.
More importantly, if you have Cursor installed all your data may be sent to their labs whether you use it or not (unfortunately - this is par for the course for all the LLMs, a la Microsoft).
That's worth a lot - especially considering that Cursor might also grow with the shift to more powerful local models and the fact that it has a respectable income stream.
Corporate contracts. A lot of companies have signed onto Cursor. xAI has a pretty toxic brand with Elon and the nonconsensual sexual images scandal. xAI has a ton of compute and few corporate customers. Now they have a ton.
> One would think Elon would learn his lesson after overpaying for Twitter
I think he took over Twitter to control what people using it see and promote right wing viewpoints. To that end it’s been a wild success.
For now, perhaps. I work with numerous companies who refuse to do business with his brands.
The same way a rocket company that counts short-lived as satellites as an asset is worth 1.7 trillion. Congratulations to the Cursor folks, they are the only winners in this.
This is also part of the AI bubble delusion: agent assisted coding works, at least for some people, for some purposes. This deal perpetuates the illusion that AI will find high value use cases. The reality may be that software development has unique characteristics you won't find in law or medicine or other domains.
Tesla is the only major Elon business that’s independent of SpaceX at this point
X AI is weak on coding and most of their founding researchers have departed for greener pastures. Musk has a great datacenter, but no researchers or data to use it with. This acquisition makes sense in that context.
See also ($, Stratechery) https://stratechery.com/2026/john-ternus-and-apples-hardware...
He bought Twitter to grab a megaphone to propagate his ego/agenda.
Grok was built for similar reasons.
He's buying Cursor to have a tool to push Grok on the world, and to have something of his own under his own ideological control to compete with SamA and Dario.
Remember those stories of lottery winners who win millions then wind up broke AF, even homeless, in only a year or two because they have no impulse control and blew through it? Same people.
Though, in fairness, that's probably the important part. Like a base model plus "coding smarts" is probably perfect for the situation.
But maybe not as much value as I was thinking.
2. Make SpaceX valuation even higher before IPO
3. Boost XAI/usage of Grok.
Opus, I watch my allotment creep up every turn…
A sobering thought.
Honestly, it felt much stranger to me to learn, a few years ago, that they're 3D-printing rocket engines. With my experience limited to building my own PLA/ABS 3D printer out of salvaged motors and parts printed on another printer, it was hard to imagine how this is anywhere near safe and precise enough. But turns out, FDM-ing some plastic blobs is not the same as fusing Inconel powder with lasers. Same with using LLMs for software engineering (whether in aerospace culture or otherwise), it's just not the same as asking ChatGPT "please make me an app to do something idk how i cannot code send halp".
They need xAI as a reason for the narrative that data centers will be in space, so SpaceX can project far more growth before the IPO. After the IPO they'll find out that data centers in space are too expensive and overheat.
Cursor might not be the new hotness, but if we believe that agentic coding is the next wave and we’ve gone from asking chatbots to actually using agents for coding, then yes, this move makes sense for Elon to hype up a SpaceX IPO.
The “apply” model to turn LLM output into code changes?
I like SpaceX a lot but this really doesn’t make sense at $60B
1. It was used to rescue himself and key investors from overpaying for Twitter, which was first rescued through xAI (and I don't know why anyone thought investing in xAI was a good idea but here we are). If our regulators weren't defanged, this deal would've gotten alot more scrutiny (IMHO). Whatever the case, this is all diluting the SpaceX business for overpriced AI vaporware;
2. From what I can find, SpaceX's revenue in 2025 was ~$18B with a $5B loss. That doesn't sound like a $1.5T+ company to me;
3. The markets are being rigged to make the IPO a success by changing the rules to force passive funds to buy into it with a tiny float (5% instead of the normal 25%); and
4. Here's the big one. I think Starship is a badly designed program that's going to take many billions more to complete and commercialize. There's not really a market for bigger payloads (evidence: ~1 Falcony Heavy launch per year) and STarship will effectively have to compete with Falcon 9 at a time when reusable alternatives (eg from the Chinese as well as Blue Origin) are coming to market.
Starship isn’t comparable to Falcon Heavy because it has vastly more volume, which will make it the cheapest way to launch Starlinks, which will be a lot of launches to begin with.
Like, TSLA had 94 gigadollars in revenue last year, and it's a 1.2 terradollar company, and most outside analysts are frankly skeptical of that multiple. SpaceX is trying to get a similar valuation on a fifth of that revenue.
Currently, this is not the case. Not fully reusable, and not costing less than F9 or BO.
1. If F9 is cheaper, why would you use Starship?
2. If SpaceX decides to force Starship adoption by simply halting F9 launches or making them prohibitively expensive, well the market is still open for an F9 clone from someone else.
My point with FH is that there isn't a demand for much bigger payloads. Now, SpaceX wants to induce demand with STarlink launches. OK, so the viability of Starship is tied to the viability of Starlink. I thought Starlink was a clever way to prove F9 reusability but the first-mover advantage won't last forever.
My main point here was that F9 was developed, SpaceX's competition was the likes of ULA with their insanely expensive rockets but whether SpaceX uses F9 or not, it has become the new baseline.
SLS is insanely expensive to build and launch but it still has a much greater launch capacity. Starship's solution to this is essentially in-orbit refuelling where, I believe, it will take ~10 Starship launches to refuel a Starship in orbit. This too is an insanely complicated capability that they haven't even begun to develop yet.
And whatever the ultimate per-launch base cost works out to be the program R&D cost has to be amortized cross those launches so even if the base cost is $10M, if you spent $10B developing the program, it still matters if you launch 10 a year vs 100.
When SpaceX goes public, they're going to be forced to disclose a whole lot more information about the program cost and I suspect it's going to be a lot higher than the rosy projectsions you get on Twitter.
Another way to put it is I think Starship could be SpaceX's Cybertruck.
That isn’t an agreement to buy
80% of those responded (250ish in the group had). Bit of selection bias there from the question - but my impression was Cursor is very much dying to competition from the labs.
Oh yeah, did I mention how Starlink is literally already in the close to Kessler Syndrome territory? all it would need is for a strong enough solar storm to hit their sats.
There's no Kessler Syndrome where Starlink is.
You'd know this if you read Kessler's first paper. It's online.
i.e if every single Starlink satellite crashes into another you won't get Kessler Syndrome.
And the same it true for the planned Kuiper.
The spacecraft wasn't designed with humans in mind first.
And second:
This is a paper by Kessler himself:
https://conference.sdo.esoc.esa.int/proceedings/sdc9/paper/3...
Figure 1 on the graph should have shamed you enough into not posting.
I guess there's a bunch of tools to not suck at this. Anyone had success here? The AI tools say I'm great because they can't pick up the kind of problems I'm talking about.
The motivation of money is literally zero to me. Maybe that's a problem as well: they want people who Are motivated by money acting like they aren't?
I wanted in because I saw them doing exciting impactful things That's literally it.
I dunno. I've been struggling with this for decades
I told myself about ten years ago that I need to move when I see things I get that intuition on. But I haven't figured out how to get in the door yet.
This seems like an elaborate Elon rug pull. A Windsurf situation 2.0
I put this in the other thread, but my personal working hypothesis is the SpaceX/Musk mission has pivoted from colonising Mars to building a Dyson sphere.
Space-based datacenters are a demand excuse for putting solar panels (and eventually, solar-panel fabrication) in space. Cursor is a demand excuse for building more datacenters (and eventaully, learning to fabricate chips). If I'm correct, the next acquisition will be in some chip or solar-panel fabrication bottleneck.
To be clear, I'm not advocating for this mission. (Though I do think the space-based datacenter pitch has gotten more scepticism than it deserves. For realistic interest-rate and terrestrial-delay values, assuming ongoing AI demand, it breaks even for surprisingly-proximate radiator-mass values. Obviously more problems beyond my toy model to solve. But I expected the math to say fuck you out the gate.)
I'm saying this is a good working theory for explaining–and predicting–Musk and SpaceX's actions. Mars explains why SpaceX's engines burn methane. Dyson sphere explains why xAI is building massive datacenters and now finding acquisition targets to fill them with.
So they are trying to take everyone’s money in bigger and bigger chunks until there is no economy left but hype.
Folks, if we spent 1/10th of the time and money we spend on this bullshit on taking care of people’s basic needs and education we would be far closer to the sci-fi future everyone seems so motivated to get to. Covid and the Trump cult seem to have broken almost everyone’s brains and we’re all gonna pay for the hubris.
Eventually, stock prices will correct hard, and retail/passive investors will be left with the bag.
The idea that merging these companies has some business purpose is hilarious. It’s purely financial engineering. Unfortunately, our existing system has little consumer protection against this kind of fraud, so Elon will probably get away with it, at least in the short term
Buying Cursor does nothing for this.
Spacex already owns Twitter and xai, trying to post-rationalize with justification like they have servers doesn't make a whole lot of sense. It's all accounting at this point.
Crazy a fork of vscode is worth 60B. What’s vscode worth to Microsoft? 200B?
See also: companies buying up the Slack and email archives of defunct startups, for training data.
This could be a lot of money to spend to acquire users that may not be sticky.
The same "mistake" that SpaceX bought 10% of Tesla CyberTruck?
Wait are they all Musk's companies? Is it a pattern?
/s obviously
Some random article on the topic: https://www.bbc.com/news/articles/cq6vnrye06po
If this is an acquihire, it doesn't compute for me (though I can't say I understand how things work in the world of the 60B level). LLMs are new enough that nobody has a big enough headstart to warrant a 60B personnel change.
The IPO angle also doesn't make sense. Musk cultists were gonna buy anyway; this doesn't change that. And for everyone else, who wants to pay down debt on an acquisition whose effect will almost certainly not be palpable in mainstream circles, if at all?
I don't fully understand the influence that comes with SpaceX subsidies and government contracts, but I gotta believe that rounding up non-lab AI chops are on that agenda?
The exact options - 60B for acquisition (obviously not a cash deal, right?) or 10B for unspecified services rendered... also don't make sense for either of the first two.
Is this just a way of the government securing contractors by proxy that wouldn't pass muster if done through the normal channels?
I've personally watched a lot of developers around me (myself included) who were enthusiastic Cursor users when it first launched gradually migrate over to Claude Code and Codex. And I don't think this is just happening in my bubble.
My guess is this is some kind of strategic play ahead of SpaceX's upcoming IPO — an attempt to get a higher valuation stamped on the company. But I'll say it again: $60 billion is absolutely absurd.
DM me if you want an invite. I am keeping it to a small on purpose.
It is good to have more competition in this area.
So there aren’t just 2 big players which also have their ideological flaws.
The combination of Cursor’s leading product and distribution to expert software engineers with SpaceX’s million H100 equivalent Colossus training supercomputer will allow us to build the world’s most useful models.
Cursor has also given SpaceX the right to acquire Cursor later this year for $60 billion or pay $10 billion for our work together."
I associate Musk with being user hostile, unreliable, meme oriented and disruptive in the worst sense; I’d like my work tools without that please.
https://www.reuters.com/technology/spacex-says-it-has-option...
Personally, I have been granted the option to buy Tesla for $30 trillion by the end of this year or pay $500 billion for a partnership. It'll all happen, I swear.
It is a complete rip off of someone else’s work vs code and is literally no better than copilot.
Makes me mad it’s even allowed to be a commercial company ripping off vs code.
It is a completely idiotic purchase. Literally one person could recreate the entire IDE themselves… like it’s so easy to make.
And there’s no brand loyalty to it because people want the best llm they don’t care about the little plugin so no moat
these are weird times...
A rocket company buying a so so overvalued coding AI company is a joke even worse than the 2000s internet pet food companies were
Guess SpaceX is the only one with the money “available”.
SpaceX, a rocket company owned by Elon Musk bought xAI, an AI company also owned by Elon Musk for... reasons. Don't give me the datacenters in space narrative, we all know it is bullshit.
It is then buying the option to buy a company for which the only contribution is a glorified VSCode plugin and the reselling of other companies LLM services at an absurd price. I understand that it is more complicated than that but 60 fucking billions, that's the GDP of a small country!
And now, Elon Musk intends to IPO SpaceX, which means he expect people to buy into all this bullshit. And considering that unlike me and judging by his wealth, he seems to be really good at understanding the market, so he is likely to be right.
shows how intense the power laws are around ai and how much of a capital game it is.
wat
Wait... dude just use openclaw.
Like, 3 months ago: ok maybe....
But dear... just use openclaw.
I guess back to Jetbrains it is.
I see being downvoted on my question already - can people who hate Musk not see the difference between asking and supporting?
SpaceX has paid for contracts to deliver services to the government and those services have saved the government billions of dollars compared to the alternative.
> those services have saved the government billions of dollars compared to the alternative
Source? All I can find is some guy saying it.
And it doesn't really matter what they've saved. It doesn't excuse conflicts of interest.
Turns out capping costs help. (See SLS) (See Europa Clipper)
Contracts aren't subsidies and you know that. It's straight up dishonesty to mix them up.
McDonald's and Burger King are government contractors
And the point of conflict of interest still stands and is unargued while we still argue the meaning of "government subsidized".
The other part is the money you're talking about was almost all spent/awarded before this current government. There's your conflict of interest.
You aren't mistaken. You know you're spreading misinformation about this stuff
"Please estimate Elon's IQ based on his timeline"
It estimated 115-130. A decision like this points to the lower end.