Elon Musk's first words to Cursor's 1,000 engineers named the company beating him

Elon Musk did not announce the details of SpaceX's acquisition of AI startup Cursor directly to the company's 1,000 engineers during the deal's announcement. Instead, Musk called into an all-hands video conference after the news of the $60 billion acquisition was confirmed and delivered a blunt assessment. He stated that SpaceX's AI division, Grok, was falling behind its competitors, while Tesla and SpaceX dominated their respective markets.

Musk urged the Cursor team to assist SpaceXAI in catching up rapidly, emphasizing that advancing AI models could eventually surpass human control – a reason why he desires his team to lead in this field. Notably, Musk also pointed out that Anthropic, a competitor, was currently leading the AI race and posing a significant threat.

This admission was particularly revealing, given earlier reports suggesting that xAI engineers were using Claude for coding purposes. To counter this, Musk highlighted SpaceX's commitment to stockpiling computational power, boasting that it would have the largest fleet of GPUs in the world. After the acquisition, Cursor CEO Michael Truell now reports directly to Musk at SpaceXAI, while former Cursor co-founder Aman Sanger joined pretraining efforts.

Sualeh Asif was appointed director of machine learning, and there was a consolidation of Slack workspaces, with staff encouraged to relocate to Palo Alto offices. Despite the deal valued at $60 billion, Cursor had reportedly generated $4 billion in annual revenue as of June, and its workforce had increased by more than four times since April.

However, 45 employees have departed since April, primarily from product and engineering departments – including some from the Graphite acquisition. Notably, Musk's comments during the call did not bridge the gap, merely funding it. SpaceXAI and Cursor declined to provide comments.