Michael Truell's startup, Cursor, is partnering with Elon Musk's SpaceX.Isaac Wasserman/Big Event Media/Getty ImagesSpaceX said on Tuesday that it's partnering with Cursor, an AI coding startup.The deal gives Cursor access to SpaceX's computing resources.Here's what smart people in business and tech are saying about the multibillion-dollar deal.SpaceX's multibillion-dollar deal with AI coding startup Cursor marks a colossal step for Elon Musk and his ambitions to win the AI race.The space company, which owns AI startup xAi, said in an X post on Tuesday that it's working with Cursor to "create the world's best coding and knowledge work AI." It's expected to combine Cursor's AI-powered coding model with SpaceX's Colossus training supercomputer, the companies said.As part of the deal, SpaceX gains the right to acquire Cursor later this year for $60 billion, or pay Cursor $10 million for the work they produce together.The companies have also held discussions in recent weeks with Mistral about a potential three-way partnership, Business Insider reported.The partnerships could be a crucial step for Musk to get ahead of rivals like OpenAI and Anthropic.Musk, who founded SpaceX in 2002, has made serious strides in AI this year.
Chief among them is SpaceX's February acquisition of Musk's xAI, which helped SpaceX expand into AI infrastructure and software. In April, SpaceX confidentially filed for an IPO, boosting gains in other space stocks and teasing a public debut this year.News of the Cursor deal electrified chatter among business and tech industry professionals on social media, many of whom viewed it as a symbiotic match. Here's what people in tech are saying about the deal.Alex Finn, founder of Creator Buddy and Henry Intelligent MachinesAlex Finn, founder of Creator Buddy and AI agent startup Henry Intelligent Machines, said the deal made "so much sense" in an X post."xAI has been behind on coding products for years now.
Cursor has a great coding product, but will fail unless they build their own model," he said on Tuesday.The deal could allow the two companies to address those issues, Finn said. While SpaceX gains Cursor's coding capabilities, Cursor gets access to SpaceX's compute infrastructure to build its own model rather than relying on OpenAI's ChatGPT or Anthropic's Claude.Finn said the hurdle Cursor faced is likely happening to many vibe-coding tools that rely on OpenAI and Anthropic, which are building competing offerings."Wins for both sides," Finn said.Hadley Harris, cofounder of Eniac VenturesHadley Harris, cofounder of seed-stage VC firm Eniac Ventures, said on X that he didn't "get" the deal."Every frontier dev I know has moved off Cursor and off IDEs entirely," Harris said on Wednesday, referring to "integrated development environments," or applications that combine building, editing, testing, and other coding capabilities.
"Only laggards are still on it. And dev tools always move from thought leaders to laggards, never the reverse."Mario Nawfal, founder of the IBC GroupMario Nawfal, founder of the startup incubator and accelerator IBC Group, said Cursor's users are largely "elite software engineers," who are an important group for SpaceX to cultivate ahead of an IPO.Bringing in more software engineers would help SpaceX, and by extension, xAI, delve further into AI infrastructure and development."@elonmusk now has space, satellites, AI, social media, and the world's most popular coding tool under one roof," Nawful said.
"What he's cooking up will be wild."Tomasz Tunguz, founder and general partner at Theory VenturesTomasz Tunguz, general partner at early-stage VC firm Theory Ventures, said the partnership allows SpaceX and Cursor to fill their individual infrastructure gaps."Winning in agentic coding requires three layers: compute, models, & distribution," Tunguz said in an X post on Wednesday. "Anthropic, OpenAI, & Google own the full stack. xAI & Cursor each have gaps,"He said xAI has massive compute power, referencing Musk's Colossus data center in Memphis, but the company is losing popularity.
Cursor, he said, has the opposite problem."Millions of developers vibe coding, but its model layer depends on OpenAI, Google, & Anthropic — all competitors. This relationship also pressures margins," Tunguz said. "For $10 billion, SpaceX buys a call option on the distribution it couldn't retain, & Cursor wins the independence it hasn't yet secured."Sarah Catanzaro, general partner at AmplifyAmplify general partner Sarah Catanzaro reacted to the deal by referencing Elon Musk's ambitious plan to put data centers in space. Amplify is a VC focused on early-stage tech startups."I guess Elon realized to get data centers in space, you first need a really good coding agent …" Cantanzaro said in an X post on Tuesday.Anand Kannappan, a former data scientist at Meta and cofounder of PatronusAIAnand Kannappan, cofounder of Patronus AI startup, said on Tuesday that the deal wasn't so much a me