You can’t say Elon Musk has concealed his motives when it comes to having SpaceX buy Cursor. The purpose is to catch up with AI leaders OpenAI, and, especially, Anthropic. A new report from the Information published Monday describes a supposed August meeting in which he spelled this all out, leaving no mystery about how he felt.
The Information’s report comes from five anonymous insiders, the publication says. This meeting was apparently on or around August 15, when SpaceX closed the deal to buy Cursor for $60 billion. Apparently this was Musk’s very first time addressing the staff of Cursor in an all-hands.
It sounds like Musk did not mince words, telling his newly acquired staffers that they were his way of playing catch-up. The Information summed up his description of his apparent predicament by saying “he wasn’t used to losing.”
The premise of what he was trying to communicate was that Tesla and SpaceX are “dominant” players where they do business, while his AI company, xAI, had “fallen behind,” per the Information.
And sure, SpaceX and Tesla are dominant in a manner of speaking. For instance Tesla has the highest market cap of any car company, but the company doesn’t dominate the roads by any stretch of the imagination. Tesla’s rankings in terms of total sales place it anywhere from 10th to 12th in the U.S., below Subaru. And if you’re in the market for a rocket launch, it’s true that there’s a good chance you’ll call SpaceX, but not a lot of people are in that market, and right now if you look at SpaceX’s own page of upcoming launches, you’ll see that the client is Starlink—in other words SpaceX—4 out of 5 times.
“Grok isn’t the leader in its market, and it desperately needs to catch up, he said,” the Information wrote.
Musk also supposedly said AI models are sure to become too advanced for humanity to control, so he considers it necessary that SpaceX “build the technology before other companies did,” per the Information. This may come across as troubling if you A) agree with Musk about AI becoming impossible to control, but B) don’t trust Musk and only Musk to be the one to control it, like he apparently does.
This report says Cursor shifted over to the SpaceXAI Slack starting last Monday. Cursor staff members are apparently being urged to visit SpaceX’s corporate HQ in Silicon Valley, and to read the book Liftoff: Elon Musk and the Desperate Early Days That Launched SpaceX.
Earlier this year, Grok, Elon Musk’s flagship AI model, was in bad shape—even if you set aside the “MechaHitler” and non-consensual deepfake stuff. In March, Musk admitted as much, writing that Grok’s parent company, xAI “was not built right first time around,” and was “being rebuilt from the foundations up.” Perhaps the clearest internal evidence that something was deeply wrong with Grok was that, according to Bloomberg, not even xAI staffers who liked to vibe code used it. They frequently used Claude, Bloomberg wrote. Musk apparently praised Claude’s parent company Anthropic at his August Cursor pep talk.
“Rebuilding” xAI would apparently require the help of a company with credibility in the AI coding space, and in April, SpaceX announced a partnership with Cursor that included an option to buy it. Then in June came the announcement that SpaceX would in fact buy it. The Information’s report claims that Cursor employees “celebrated the news with rocket-ship emojis on Slack.”
While Cursor has reportedly been on a hiring spree, and total headcount has grown in recent days, the Information says 45 Cursor staffers have departed since April. Gizmodo reached out to SpaceX for comment. We will update if we hear back.