Cursor Is Developing an AI Agent to Compete With Claude Cowork
The Takeaway
- Cursor is making a push beyond coding to capture more business customers. The new AI agent, internally referred to as Sand, would act as a general-purpose personalized assistant.
Work on the new agent began after Cursor started leasing compute capacity in April from SpaceX’s AI unit, known as SpaceXAI, the people said, and comes ahead of SpaceX’s planned $60 billion acquisition of Cursor. The new agent could buttress the enterprise business of SpaceX’s AI unit once that deal closes. It follows the two companies’ joint introduction of a new model, Grok 4.5, meant to perform engineering tasks as well as general knowledge work.
The new Cursor product, internally referred to as Sand, is its first product aimed at more casual AI users rather than developers. It would act as a personalized assistant, performing tasks such as responding to emails or texts and organizing spreadsheets in addition to handling engineering work, the two people said.
Part of Cursor’s product team is working on testing and honing the project, which the company rolled out internally in late June, one person said.
It is unclear whether Sand will make it to market. Cursor typically rolls out a new product to staff before deciding whether to launch it, one person said. The company is also facing uncertainty due to its pending merger with SpaceXAI, which could alter Cursor’s product road map.
If it moves ahead the product would join an increasingly crowded field of AI work assistants. OpenAI announced an AI agent, called ChatGPT Work, on Thursday, that it says can automate presentations and perform research.
The SpaceXAI unit had struggled to catch up in coding after rival Anthropic cut it off from its models, prompting SpaceXAI to team up with Cursor on AI work. SpaceXAI has also seen leadership turnover and a string of engineer and researcher departures this year, including a wave of exits after its Cursor collaboration.
Founded in 2022, Cursor initially offered a coding editor powered by Anthropic and other outside companies’ AI models, and has since developed a GitHub competitor. It also released its own coding model, Composer, late last year. Cursor has focused primarily on using the coding data from its developer base to fine-tune open-source models.
Though Cursor was an early leader in coding tools, it has faced mounting competition, including from the same model developers it originally relied on to power its products. Cursor CEO Michael Truell told staff during an all-hands in May that the company sees its next growth opportunity in business users that aren’t developers, and that customers were asking for such products, a person close to the company said.
SpaceX’s pending acquisition of Cursor will give the coding startup a parent with significant resources. Cursor could also meaningfully add to SpaceX’s AI product revenue once the acquisition is complete. Cursor’s revenue had reached an annualized pace of $2.7 billion as of March. SpaceX, meanwhile, reported roughly $470 million—10% of its overall revenue—in AI solutions revenue in the first quarter, consisting of Grok subscriptions and business access to models.
SpaceX has meanwhile been spending heavily on AI infrastructure, with AI capital expenditures tripling to $7.7 billion in the first quarter. In the run-up to its June initial public offering, however, SpaceX inked major compute leasing deals with outside companies, including a $1.25 billion per month one with rival Anthropic. Those deals promise to significantly lift SpaceX’s AI-related revenue, although the company says the arrangements are flexible, and it could decide to take compute capacity back later if it needs it.
SpaceX’s acquisition of Cursor is set to close in the second half of 2026, but the companies haven’t disclosed the exact date. It’s also not clear how deeply Cursor is collaborating with SpaceXAI on the new general-purpose agent.
The two companies did work together on Grok 4.5, released as an update to Grok, SpaceXAI’s flagship model brand. SpaceXAI said in a blog post that the model is tailored for engineering tasks, as well as basic office work.
Truell told developers at a conference last month that the model, Grok 4.5, was trained on tens of thousands of xAI’s graphics processing units and has 1.5 trillion parameters, making it competitive with leading models from Anthropic and OpenAI.
Cursor’s new agent appears to be targeting the same business opportunity xAI tried to tackle starting last year, when it began working on its own general-purpose agent. Musk has said that project, called Macrohard, aims to create a digital white-collar worker.
Work on the Macrohard product largely stalled at xAI earlier this year, according to two people with knowledge of the project. Some of the work shifted to Tesla, which began working on the project in January as part of its $2 billion investment in the AI startup. Some members of Tesla’s Autopilot team have continued to work on the project in the months since under the name Digital Optimus, one person said.