Cursor Is Reinventing Itself as SpaceX Deal Looms
The Takeaway
- Cursor expands to general AI model development.
- Cursor CEO aims to develop industry leading models by end of this year.
- Cursor’s sales team grew 60% while launching Grok 4.5 with SpaceXAI.
Cursor, the coding startup set to be acquired by SpaceX for $60 billion later this year, has been mapping out a major transformation.
Michael Truell, Cursor’s CEO, told staff in a companywide meeting in May that the company aims to become a top-tier AI model developer, according to three people who heard the comments, a shift from its roots of specializing in coding. Cursor has also accelerated hiring in sales and growth roles, though it has made smaller cuts elsewhere.
At that May meeting, Truell said he aimed for Cursor to push beyond the capabilities of current AI by 2027 and to accumulate a significant advantage in compute by the same time, the people said. He also said Cursor would develop industry leading models by the end of this year, according to a person close to the company.
But Truell also acknowledged that the looming potential acquisition by SpaceX had unnerved some Cursor staff. SpaceX got an option to acquire Cursor in April, when the companies announced a compute and product development partnership that let Cursor use SpaceX’s data centers. SpaceX didn’t announce it would move ahead with the acquisition until after it had completed its initial public offering in June.
Truell said some staff expressed concerns about the possible acquisition in an internal Employee Pulse Survey. He described Cursor as being in the midst of rapid change and substantial growth as it continues to expand its offerings to customers, and he said he hoped to provide more clarity on the partnership in the future.
In the meantime, Cursor has been pushing ahead on developing a general-purpose chatbot as well as a competitor to Anthropic’s Claude Cowork, two people familiar with Truell’s comments said. SpaceX CEO Elon Musk has already seen some demonstrations of Cursor products, one person said. In recent weeks, senior leaders at Cursor met with Musk to give him updates on some of its offerings, they said.
The partnership announced in April involved the companies collaborating on existing models such as Grok using SpaceX compute, as well as new models and related tools or products, SpaceX said in its IPO filing.
But the pending acquisition now limits how much more the companies can expand their work together or reshape their operations ahead of the deal. Antitrust rules typically require that companies awaiting a merger or acquisition continue to operate independently, though work under existing partnerships can continue. And following SpaceX’s announcement that it was moving ahead with the deal, Cursor leadership has repeatedly told staff that any major changes, such as an official Cursor rebranding or restructuring efforts, will be limited until it has closed, one of the people said.
SpaceX did not respond to a request for comment.
Going to Market
Truell’s new stated goals for Cursor echo what Musk previously outlined as goals for xAI before his rocket company SpaceX acquired the AI firm. Musk told staff late last year he believed xAI could achieve AGI as soon as 2026 and emphasized that the company was equipped to outpace competitors due to its stockpile of compute, people with knowledge of the meeting said.
Instead, xAI—now called SpaceXAI—has struggled to catch up with competitors, especially when it comes to coding, prompting it to seek a tie-up with Cursor.
In an all-hands meeting with staff shortly after the partnership announcement, Truell said that SpaceXAI wanted to capitalize on Cursor’s brand and enterprise relationships and would benefit from Cursor’s much larger go-to-market team, one person said.
Cursor quickly began prioritizing requests from SpaceXAI and Tesla engineers, three people said, while some Cursor employees also began working in xAI’s code base. xAI product lead Andrew Milich, a former Cursor product lead, has been working closely with Tesla engineers on beta versions of SpaceXAI models.
Since April, Truell has become a regular sight at SpaceXAI’s office in Palo Alto, Calif. The two companies held multiple meetings early on with senior-level staff where they shared updates and proprietary details on Grok. SpaceXAI also made some cuts to engineering staff after the partnership began.
And Cursor’s go-to-market team, which has about 160 people, has grown roughly 60% since early April, according to figures from Live Data Technologies. It’s also far larger than SpaceXAI’s sales team, which comprises about a few dozen members. Cursor also has dozens of open roles, many in sales, posted on its website. Brian McCarthy, who joined the company from Rubrik in February as president of global sales and worldwide field operations, oversees much of that work.
While Cursor has been growing in sales broadly, the company has pulled back a bit in certain roles. In recent weeks, it cut jobs on a few teams, including product and marketing, two people said. Overall, Cursor employs around 1,000 people, a person close to the company said.
Last week, SpaceXAI and Cursor released their first jointly developed model, Grok 4.5. The model is competitive with Anthropic’s Opus 4.8 and OpenAI’s GPT 5.5 on several benchmarks, marking a major leap for the companies.