Elon Musk’s message to Cursor’s 1,000-plus engineers after the $60 billion takeover: We are behind, and the company beating us is… |
Elon Musk waited until the ink was dry to tell Cursor what he actually wanted from it. On the day SpaceX confirmed it had completed its $60 billion acquisition of the AI coding startup, Musk dialled into an all-hands video call and told more than 1,000 Cursor employees that SpaceX’s AI division had slipped behind its rivals, according to a report in The Information citing five people with knowledge of the meeting.His framing was blunt. Tesla and SpaceX lead their markets, he said, but Grok does not, and he is not used to losing. The fix, as he put it to staff gathered at Cursor’s San Francisco headquarters and at smaller offices, is for them to help SpaceXAI catch up quickly. He also told the room that AI models will eventually become too advanced for humans to control, which is exactly why he wants his side building them first.
Elon Musk says Grok is losing the AI race to Anthropic
The praise for a competitor was the most revealing part of the call. Musk said Anthropic was leading the AI race and was a strong rival, one person told The Information. That is an awkward thing to concede when earlier reporting suggested xAI’s own engineers reached for Claude when they wanted to code.His counterweight is hardware. Musk said SpaceX would keep stockpiling more compute than anyone else in the race, an argument Cursor made publicly too when it said the deal gives it “access to the largest fleet of GPUs in the world.”
Cursor CEO Michael Truell now reports directly to Elon Musk at SpaceXAI
The acquisition was structured unusually from the start. SpaceX signed a tech-sharing and compute deal with Cursor in April that carried an option to buy the company for $60 billion, exercised it in June days after its own IPO, and closed it in mid-August. Leadership had told staff early on that little would change day to day.The org chart says otherwise. Cursor CEO Michael Truell now holds a leadership role at SpaceXAI and reports directly to Musk, co-founder Aman Sanger has moved into pretraining, and Sualeh Asif is director of machine learning. Slack workspaces have been merged, staff are being nudged towards the Palo Alto offices, and Truell has offered to buy them copies of Liftoff, a book on SpaceX’s early years.
Cursor hit $4 billion in revenue, but 45 staff have quit since April
Cursor is not a distressed asset. It reportedly crossed $4 billion in annualised revenue in June, and headcount has more than quadrupled over the past year on the back of heavy sales hiring. But 45 people, mostly from product and engineering, have left since April, The Information reports, including roughly 20 who arrived through the Graphite acquisition. Recent senior exits cover reinforcement learning, design, brand, enterprise sales and the general counsel’s office.The gap Musk described on that call has not been closed by the deal, only funded. SpaceX now owns the coding tool developers reach for, alongside a model most of them do not. Whether Grok narrows that distance is a question for the next twelve months. SpaceXAI and Cursor did not respond to requests for comment.
