SpaceX to buy Cursor for $60B

It's a big part of what, in my experience, is separating the very good engineer from the iffy one: Do you have a good mental model, and can you put yourself in the shoes of people sitting in a different mental model? It makes you a better dev, and even more so when it comes to AI tools, which have their own kind of alien brain.

1) The data they have flowing through the system that enabled them to build composer (which is much better than stock kimi 2.5) and is presumably allowing the training of a new model on space Xs compute.

2) Cursors new 'github' replacement.

3) Enterprise sales/traction

If you look at all of these together, it's not implausible that they end up mostly 'owning' coding in 5 years time. If they replace GitHub with something more compatible with agentic coding and bring it into their whole ecosystem providing cloud and local agents, PR review and own frontier coding model.

It's specialised vs 'borg' isn't it. One way of thinking is that the world is owned by Anthropic/OpenAI and coding is just one of many things their model and software does. Another view is we have a 'coding with LLMs' company that specialises in this field of endeavour. Hard to say which wins, but I think they have a shot.

Personally my only objection to cursor is that it's more expensive. That's it, otherwise it is great to be able to choose say GPT-5.5 when I want to work on backend and Opus when I want to work on front end. Great to have PR review built in. If they were able to get composer 3 to as good as GPT5.5 / fable at the price of composer 2.5 they'd be winning on price again.

This is the same data they used to finetune Kimi K2.5 to make their newer Composer models, which benchmark substantially better than Kimi K2.5.

I've heard they also want to build their own base models, which will also benefit from their large amount of high-quality training data. Which will solve Grok's model quality problem.

This is all unsourced conjecture of course. But it's what I've heard.

Maybe because SpaceX paid with monopoly money (all stock deal)?

xAI overbuilt their data centers - they can't find paying customers for them, that's the reason they made deals with other companies like Google to use their own datacenters.

Cursor has the opposite problem of not having enough capacity. So this works well for them together.

Weather it's worth it - if you beleive that AI will solve every problem then having a piece of the pie early on might be worth it.

Remember how when google bought youtube for 1.65 billions people thought they are crazy? Or when facebook bought instagram.

60B is a crazy number but might be worth it for someone fighting for world dominance :)

From a valuation model - $4B ARR with rapid growth, and the ability to shift traffic to internal models (honestly, massive amount of the time "composer" - their internal model is fine, and obviously going to get better). Say 17x Multiple which isn't unheard for a rapidly growing Startup with solid future structural profit elements (moving to internal model) - that gets you to $68B.

We’re in the new era where startups boast about and bought based on revenue and not on just a number of users with unclear path to monetizing as it had been for the previous couple decades.

We can also note that we see Thrive Capital (Kushner) again in a win.

It can't as long as there is plenty of AI without it.

The real differentiatior is that if $60B today turns out to be all thrown away in a worst-case scenario, it would be easily more affordable and there would be less negative impact than $47B at the time if it was all thrown away on Twitter.

For example - I might (real world example from this morning):

"Create a script that installs hashicorp vault and consul, store the data on consul. Then create ahelper script that will fill the vault server with sample data. Add HTTPS support. Now write a framework that reads and decrypts the encrypted data in consul. Support old (pre 1.3) and new (post 1.3 vault). "

That generates a 6 page plan using Opus 4.8 w/1mm context, including notes on what to prioritize, what format to create the scripts in, etc... (My cursor guidance already has a couple months of hints as to what I want in terms of scaffolding unit tests, canonical linux, performance, security, etc...)

That 6 page plan is the "Prompt" - but it's entirely generated by Cursor/Opus. It's there to tweak if you want to emphasize, or provide some taste - but, honestly - it probably does a better job than I would - so ~90% of the time I just accept the plan as is.

What actually matters is the ability to communicate well in general, not anything LLM-specific. Being able to state what you want clearly and unambiguously, and having a sense for what additional information you need to dump, even when the other side claims they already have everything they need.

Cursor does have it's own model - it's a heavily reworked version of KimiK2, called "composer" - that I use a lot of the time when I have fairly straightforward tasks that don't require a lot of exploration or independent thought. Lot cheaper - the Input/CacheWrite/CacheRead/Output costs of Opus 4.8 are $5/$6.25/$0.5/$25 per mm tokens, vs $0.5/-/$0.2/$2.5.

Some of the issues (off the top of my head):

- Note - that my "product" was about 3,000 lines of code - so tiny. But https://metr.org/ should give you some insight into the complexity the models are capable of.

- you have to be able to imagine the product. If I have the time, and energy, to imagine what I want - the model will build it. Here is an example of a much better programmer than I and something he wanted built - https://www.boatbomber.com/blog/claude-fable-5

- These are the first drafts. On average - any complex system needs about 10 years and at least 1000 active and enthusiastic about reporting users to really get robust code. Writing if via LLM doesn't (at least so far in my experience) help that much in reducing bugs if you were previously following any semblance of TDD. Lots of bugs in the code - the products you listed above have literally tens of millions of years of user experiences and bug reports that got them to where they are today. No silver bullet yet - just faster, less effort - and it enables non-technical people to create (still buggy) products.

The end point may squeeze quality of operations at the subminute time span for ground control environment seriously launching Starship rockets one an hour, for example.

Over time - I expect Composer will be cheaper than Opus 4.8 - but the nice thing about Cursor - you can flick between models.

And (this is purely a personal thing) - I really like the extensive collection of "Plans" that cursor tracks - there isn't really a similar thing in Claude Code - but I really like the Claude.AI interface for everything else. It's also a much better general knowledge agent - the Cursor Chat interface isn't as nice.

For example, sometimes Claude just obsessively reads files and goes on massive tangents. Then when I stop it and ask, "why are you doing that?", it kindly apologizes and admits it shouldn't have gone on a tangent.

The token burn if I don't stop it would be quite high.

Granted, this might be because I'm not giving it optimal prompt/negative-prompt instructions though.

If I reject, then the AI will struggle to modify just the parts I disagree with, if I accept, the AI will tend towards adding code rather than updating the bad code.

At that point copy paste without agentic coding tends to work much better.

I tried having it write some tests today. It got very close to what I want, but picked a stupid set of input values (two fields that look independent that should only be used with related values). I thought about "how do I explain this" and then just went in and fixed it myself.

How is it easier to write "Okay, go back to testBlah and change xxx to yyy" versus clicking on XXX in the IDE and typing YYY by hand? Maybe if you had 500 faulty tests and were forbidden from using search-and-replace for some reason.

It makes sense when code generation is the limiting factor, but I end up with a lot of changes where the actual code delta is smaller than the necessary prompt to convince the bot to produce it.

Also https://xcancel.com/mitchellh/status/2066657032938442833#m

I really don't see IDE's going out of fashion anytime soon.

What?

> An IDE at this point is best as a tool for code review.

I heard from a friend that most devs building serious stuff still write code. It's shocking but true. (No code review needed.)

Moved on to Zed (native Rust rendering) 2 weeks ago -> nothing flickers.

Sadly, with Fable 5 cutoff, I am actively exploring CC alternatives. Pi/OMP.sh works great as an agent (definitely better than CC). GPT is seemingly not as good as Opus, but with better agent and better skills, it probaly won't matter anyway. GPT lets you use any agent on Pro subscription.

Ctrl+c -> new tab -> `claude —resume` is deeply ingrained at this point.

I think there's a pretty good chance that we've reached the point of diminishing returns, for our specific use case.

There are still like a billion other (more difficult) use cases to be tackled, but I think "generating code" has gotten really good to the point where the other bottlenecks will prevent further exponential progress on this specific task.

Closing this gap is done in the harness, either through Skills, user behaviour/prompts , Agents.md etc etc.

I think that this is an area worth investing time in, but it is indeed hard to know what the scope of this is.

Am I an outlier or do you just judge people for weird reasons? I’ve never seen an IDE person judge a terminal person, it’s always the other way around - what’s up with that?

Anyways, I use cursor for a number of reasons:

1. I still want very quick access to the code in the editor. So I want the IDE.

2. Generally solid defaults. Auto-compaction, plan mode, etc, all work pretty well.

3. When I switched back to it from Claude code, it was genuinely faster at running Opus than Claude code. Claude code was grinding to a fucking halt every two minutes.

4. So annoying to search and view your chat history in Claude code. I’m a visual person. I also want all my repos loaded into a big workspace. Cursor also does that great out of the box.

5. I don’t have time to redo my terminal setup again to optimize it for Claude.

Tbh, I’m not aware of much that Claude code does that you can’t also do in cursor. At the end of the day, the agent loop and tools are not that different, and the model is identical.

The tool you use to prompt it is not the hard part. I just work faster when I have everything easily accessible in one spot, which was easier for me to accomplish with cursor than Claude. I found it just got out of my way.

Why on earth would you want to look at a code diff in a terminal? Why on earth would you want to use weird bespoke keyboard shortcuts to navigate sub-agents in a TUI session. Why on earth would i not want the ability to open/edit a file manually in the tool im using to write code.

can someone please explain this to me?

Once I got the tmux settings for proper scrolling and whatnot it feels fine. Honestly the TUI of tmux is the one that really enrages me - so much complexity for just "I want to switch terminals on my remote".

Why on earth would you want to look at a code diff in a terminal? Why on earth would you want to use weird bespoke keyboard shortcuts to navigate sub-agents in a TUI session.

can someone please explain this to me?

It's a game for him, but so ridiculous. While Tesla was pushing electrification and SpaceX pushing rapid rocket re-use I kind of tolerated Elon's antics, but since he got involved in politics and DOGE I can't bear it anymore.

I LOVE puppies, but if I had a trillion of them the last thing I'd want is another puppy.

I agree, and most people do too, yet he'll get away with it. We're in the kleptocracy phase of the fall.

So just increasing market cap won’t do it alone.

Even if he merged them, they still have to produce WAY more than they are now.

I’m not denying that his companies are awash in zany financials, but I don’t think that’s ever been the point

I called bubble on Tesla and Bitcoin both over 10 years ago.

Still going strong.

It's a whole lotta chaos, fueling some pretty messed up stuff. It is hard to watch.

I don't think anybody actually believes SpaceX will be worth it. I think some still believed Tesla would be, but their competition has caught up. Everybody is just there to ride the wave of mass hype and FOMO, thinking everybody else is an idiot.

This has been coming in a few waves over the years in Tesla, cryptocurrencies, the Everything Bubble, etc.

And this is before getting to worrying about what kind of large-scale market manipulations we're up against (e.g. relevant example: https://www.forbes.com/sites/hershshefrin/2025/04/05/signifi...) Compounding this is the fear that even the indexes seem to be compromised (fast-tracking SpaceX etc.) I'm paranoid but at times the entire US stock market looks like a gigantic pump-and-dump. (Seriously, some of the stocks, like NET, rise and fall with highly predictable regularity.)

I can't tell, and I know I'm not nearly smart enough, attentive enough, and definitely not well-connected enough to have the perfect timing required to survive a sudden shift or whatever game it is the big players are playing, so I'm just trying to play it safe (which is also hard, because everything is impacted at this scale!)

But as they say,"the devil is in the details"

- Can Starship transport people from London to Sydney safely economically, compared to Boom, which is working on a supersonic passenger aircraft ?

-Why can the boring machine dig tunnel at much lower cost than it's competitors? Maybe it's because the everyone else tries to dig tunnels for trains, which have a much larger diameter than Musk's boring machine, which only fits his "Teslas at a tunnel" concept? And it might be a good idea. Worth a try. But be honest about it.

-Sure, data centers in space probably have some great uses, and I'm happy he's trying, but will they ever be more economical than deploying servers on the ocean? On countries with very cool climate?, powered by new energy technologies?

The cynical viewpoint is that this is Elon capitalizing on current datacenter hype to inflate SpaceX's valuation based on theoretically overcoming tremendous amounts of hard physics problems, over the next 5-10 years. As he did with FSD, Boring Company / Hyperloop, Twitter, etc.

It's a ridiculous idea, and I don't believe it's what they are really pursuing.

Like, sure, but also, that seems like a lot of work, a lot of extra cost, and a lot of risk, all just to avoid building it in Kansas.

A less good business for the data center company.

https://www.youtube.com/watch?v=jbp3kdJZ1_A

Elon has always been a Department of Defense/intelligence asset larping as a capitalists. You can't exactly go to congress and get a quarter of the government budget to do globe spanning surveillance from space, or convince them to let you fund, build and maintain a platform for psyopping your own civilian population (x) So you go get your illegal projects funded through capital markets with through an asset like Elon. As soon as the department of defense started focusing on subterranean warfare and how its the future of wars Elon starts a tunneling company.

Elon is just Howard Hughes v2, they're running the same script again.

From the regulators’ perspective: it is a risk, but you disclosed that risk in the prospectus that buyers are assumed to have read (what percentage ever actually do?), hence it is fine

Well, when you buy into an IPO, they make you sign to say you read it. So either you did, or you made a false statement on a legal document

If you have this much wealth in something as unpredictable as the stock market I think the very wise move is to start converting it into stock backed loans[1] that you leverage to buy real assets - buy islands and small countries, buy other successful large companies and just let them keep trending slowly upwards, pick up that New Zealand bunker... just try and get your money diversified and into things that would survive a stock price collapse. Even if Elon did this with 1% or 10% of his wealth and kept the vast majority of his assets invested in this one clump of companies and they went to zero he'd still be sitting on an insane pile of cash.

1. Lets all pour out a drink to the bankers who authorize such insane loan agreements.

I mean, if he wanted to sell tomorrow, who COULD spend $2-3 Trillion to buy it, and who WOULD? Anyone with that kind of money to spend today knows what a scam it is

I don't think they were. All the Mars stuff is just dressed up version of The Boring Company - a distraction by Elon to better position his other interests.

There's no money in going to Mars and there's no reason to, from a financial perspective, and Elon doesn't care about anything beyond wealth and power.

We already have a perfectly usable planet. It just need to be taken care of.

85% of the compute for the final model is from them, and not the base Kimi model.

Composer post training is clearly very good, only second to Anthropic and OpenAI.

It does irk me a bit that they try to hide the fact that it's based on a chinese pretrained model though.

listen and learn :)

> See here https://cursor.com/blog/composer-2-5

> 85% of the compute for the final model is from them, and not the base Kimi model.

Of course they could be lying, but it seems feasible that they are adding a lot on top of this

While other commenters have pointed out lots of details that point towards the favorable structural environment going forward, another idea that roots my thoughts towards this is that by creating facts on the ground, they are defining the new starting point.

Ultimately, reversing all of the different 'wrongs' or irregularities will be costly to both the opposition's political and attentional capital.

Even if so, are the Democrats really going to do the house cleaning required to fix this? Their recent history implies that they'll try to pretend things are running normally, until it all explodes in their face (again). Maybe I'm wrong, and they'll actually fight for the country, but... I'm not surprised that companies (and markets) are expecting them to just... not.

Even if I was this optimistic, the executive with a stuffed supreme court is not going to care what congress thinks.

We'll sooner declare market manipulation a form of speech.

> Please don't use Hacker News for political or ideological battle. It tramples curiosity.

RIMR says:

> nobody will ever challenge this, given the current political direction of the United States

It's obviously hyperbole to say that NOBODY will EVER challenge this, but I'd say it's directionally correct:

1. The Supreme Court is controlled by a conservative, pro-big-business majority that makes it very difficult for any legal attempts to challenge Elon's actions to survive litigation.

2. The United States Senate has a conservative, pro-big-business bias due its over-representation of rural voters and its internal norms (filibuster)

3. The United States House has a conservative, pro-big-business bias due to the gerrymandering efforts of Republican-controlled state legislatures across the country (which the Democrats have tried to counter and failed, see Virginia)

4. The conservative, pro-big-business Supreme Court has ensured that elections in the United States overall have a conservative, pro-big-business bias due to the unfettered spending allowed after Citizens United.

So yes, the winds seems to be against Republicans and Trump in the mid-terms, but the structural biases of the government are still very much pro-big-business, pro-capital, and anti-regulation.

It will take much more than a single mid-term cycle to reverse that trend.

I am not this optimistic and I think it is dangerous to be this optimistic. Even putting aside mischief, just as a matter of reality, the gap always closes. A loss, yes. Hopefully. A slap around the face, maybe. Perhaps enough to get a clear win in the House. A pummelling? Nah. I think they might still keep the Senate.

Trump supporters falling out of love for him could well just lead them to focus their attention on down-ticket Republicans who figure out how to make them feel OK about their past choices, and since they need to feel OK, they will come out. Wholesale rejection of the party is unlikely since it is already splitting into two factions.

It is simply not feasible train an LLM to be as good as these frontier models are without a TON of high-quality examples of what "good" looks like. Every time a Cursor user (who didn't opt out of analytics) does/doesn't hit a "retry" button, or rejects/accepts an LLMs output, it allows Cursor to log record of a specific LLMs output and a binary signal of that output's quality.

Given they've been at this since 2022, and for most of that time sat comfortably at #1 in market share among comparable AI coding tools (only recently getting topped by Claude code), Cursor likely has the largest, highest-quality, SWE-specific dataset in the industry by a sizable margin.

Grok being so late to the party could only train on twitter data in combination with whatever they could source publicly or purchase privately, and likely hasn't had anywhere near the usage they'd need to build up their own competitive dataset from scratch anytime soon.

If you believe (as SpaceX seems to) that the AI's total addressable market is over $26T, and acquiring proprietary, high-quality training data is the difference between capturing ~1-2% of that market and ~10-20%, then $60B starts to look like a bargain.

Grok 4.3 was made on Colossus 1? It's not frontier quality, but it's definitely not nothing. Also, Cursor brings more expertise to help them improve their utilization further.

Additionally, I struggle to see how renting out excess capacity is anything but good. It brings in a ton of cash at a price premium, and ensures they have headroom to gradually phase out rental capacity as their internal demand increases.

> You think they have more compute than Google?

Fair point. No way they have more raw compute, but I do think it'd be fair to say they have more "excess compute capacity" than Google, but even that is pretty speculative.

> You think they have the most cashflow?

Again fair point. I was overestimating how much cash comes from a $2T IPO before actually looking at the numbers. My revised take is that SpaceX/xAI are now in-line with the other labs on cash liquidity, rather than leading (where pre-IPO they were way behind)

> You think they have higher quality training data than Anthropic, Google, and OpenAI?

Yes -- I'm standing by this one. Cursor has a multi-year head start on agentic coding data collection, and a GUI UX that likely provides richer user sentiment & quality signals than something like Claude Code.

Obviously OpenAI & Anthropic have far larger proprietary datasets for chat histories, and Google is an undisputed leader in data hoarding. But when it comes to agentic coding specifically (AI's most compelling use-case, IMO), I think Cursor's data is a HUGE deal. This is backed up by how good Composer 2.5 was given it was essentially Kimi K2.5 + Cursor data.

Additionally, I also suspect its possible to mine Twitter for user engagement & sentiment analysis to create surprisingly useful datasets.

> Training on what? They rented both of their data centers away!!!

I thought they only rented Colossus 1, but you're right they're also renting out a portion of Colossus 2. That said, they still have 2/3 of their Colossus 2 facility available for internal, which is likely enough to build something competitive. They also have 90-day termination agreements in place once they forecast a need for more internal capacity.

All that said, while I appreciate your pushback & I was overly hyperbolic on a few key points in my last comment, I stand by my core theses: The Cursor acquisition (assuming it goes through) combined with the SpaceX IPO puts xAI/Grok right in-line with the other big labs, at least in terms of positioning.

Whether they're able to execute remains to be seen, but I would not at all surprised to see a frontier-quality Grok 5 or Composer 3 release before the end of the year.

Perhaps that's where the money and strategy is. (a) stronger need; (b) if you can build systems without real expertise, you don't have to stomach their salaries or politics.

I guess if I found my already-vested shares were worth $4 million, I'd still be motivated to get the remaining $8M by working a couple more years. How surreal that would be, to find yourself extremely "FIRE" (Financially Independent, Retire Early) but also kind of obligated to yourself to keep working hard for a few more years, as walking away from that kind of money seems crazy.

We've been mining platnium and aluminum for all of humanity, so we know they exist, "The TAM was incredibly apparent". We know there are astroids worth 1 quadrillion dollars. So, if SpaceX has a 1% chance to capture that, thus the valuation.

The only way you can see this continue as a model if space based data-centers actually can beat everything land based. And that is very questionable.

> What can he do now that he's got a $85B war chest of cash?

Increase the profit of Micron and NVidia?

Matter of time before its no longer considered good enough by the main players.

Anthropic are building their own Datacenters so it's a stop gap