AI Startup Cognition CEO Slams SpaceX Acquisition Rumors!

Elon Musk's SpaceX is aggressively pursuing its artificial intelligence ambitions, aiming to catch up with industry leaders like OpenAI, Anthropic, and Google. The company's strategy involves both significant acquisitions and the development of its own AI capabilities, with a particular focus on the lucrative field of AI-assisted coding.

A recent report by Bloomberg indicated that SpaceX had attempted to acquire Cognition, a prominent AI coding startup, citing sources familiar with the matter. This potential move was seen as a way for SpaceX to further deepen its push into AI coding and enhance its competitiveness for enterprise customers, given Cognition's coding agent Devin and its established client base, which includes major names like Mercedes-Benz, Citi, and Goldman Sachs. However, Cognition CEO Scott Wu swiftly disputed the report on X, declaring the story "inaccurate" and unequivocally stating that Cognition "is not for sale" and that the two companies "haven’t been in talks." Despite Wu's denial regarding an acquisition, Bloomberg's report also suggested that while acquisition talks are no longer active, the companies might still be discussing collaboration, potentially involving Cognition utilizing SpaceX’s considerable computing capacity. SpaceX is known to sell this capacity to other AI players, such as Anthropic, until it requires it fully for its own operations; a claim Wu did not specifically address in his denial.

This reported attempt to acquire Cognition follows on the heels of SpaceX's successful $60 billion acquisition of another AI coding startup, Cursor, whose deal closed last week. The two companies were already engaged in collaborative efforts prior to the acquisition. Earlier this year, SpaceX also acquired Elon Musk’s AI company, xAI. Post-acquisition, xAI went public in June through a blockbuster IPO, briefly pushing its market capitalization to nearly $2.3 trillion at its peak. Despite this significant valuation and investor enthusiasm for SpaceX's AI aspirations, which notably include plans to construct data centers in space, the xAI business remains in its relatively early stages. It has faced challenges in keeping pace with its competitors and has contended with controversies surrounding its chatbot, Grok, including the "MechaHitler" incident last year and recent nonconsensual sexual imagery scandals, which complicate its efforts to attract enterprise customers.

Musk has conveyed to SpaceX employees his belief that AI will account for "99% of the value" of the company within "four or five years," underscoring the imperative for SpaceX to substantially increase its AI-derived revenue. AI-assisted coding has emerged as one of the most promising avenues for monetizing this technology, as evidenced by Anthropic's rapid growth, significantly fueled by its Claude Code. The integration of Cursor into SpaceX's operations was a strategic step in this direction, culminating in the joint release of Grok 4.6 by Cursor and SpaceX this month. This new model reportedly achieves higher scores on benchmarks for coding and complex multi-step agentic tasks, showcasing the immediate benefits of such collaborations.

Cognition, meanwhile, stands as one of the largest independent AI software coding startups that has not yet been absorbed by a major AI model maker. The company recently demonstrated its significant market standing by raising a $1 billion funding round in late May, valuing it at a $25 billion post-money valuation. Bloomberg also reported that Cognition is now in early discussions for a new funding round that could push its valuation to $40 billion. The startup previously made headlines last year when it acquired the remaining assets of competitor Windsurf, following Google DeepMind's "acqui-hire" of Windsurf’s CEO and top research talent in a $2.4 billion deal that encompassed talent and licensing rights. Post-merger, Cognition implemented a demanding work culture, laying off 30 employees and offering buyouts to the remaining 200 Windsurf employees. Those who chose to stay were met with stringent operational expectations, including workweeks exceeding 80 hours and a requirement to be in the office six days a week. Such an intensive "wartime work ethic" is notably consistent with the corporate culture fostered by Elon Musk, who is known for his own demanding schedule, often working up to 120 hours a week and occasionally sleeping on office or factory floors.

As SpaceX continues its aggressive pivot into the competitive AI arena, its strategy of acquiring key talent and technologies, while developing its own formidable AI infrastructure, remains central to its long-term vision. The reported interactions with Cognition, despite the CEO's denial of an acquisition, highlight the ongoing strategic maneuvering in the high-stakes world of artificial intelligence.