SpaceX Explores Acquisition of AI Coding Startup Cognition

Elon Musk’s SpaceX recently attempted to acquire Cognition, an AI coding startup, as the company intensifies its efforts to close the gap with OpenAI, Anthropic, and Google in the competitive AI landscape. Bloomberg reported the development on Wednesday, citing sources familiar with the matter.

Cognition CEO Scott Wu quickly disputed the report, posting on X that the story was inaccurate and that Cognition "is not for sale," adding that the two companies have not been in talks.

The report emerges just days after SpaceX finalized its $60 billion acquisition of Cursor, another AI coding startup, with the deal closing last week.

SpaceX had earlier acquired Musk’s AI company, xAI, and subsequently went public in a blockbuster IPO in June, with its market capitalization peaking at nearly $2.3 trillion.

SpaceX has pitched investors on its AI ambitions, which include eventually building data centers in space. However, the xAI business remains relatively early-stage and has lagged behind competitors.

It has also faced challenges with its chatbot Grok’s tendency for controversy, including last year’s “MechaHitler” incident and this year’s nonconsensual sexual imagery scandals, as it seeks to attract enterprise customers.

Last week, Musk told SpaceX employees that in about “four or five years, AI will be 99% of the value” of the company, but achieving that would require significantly more revenue from AI.

AI-assisted coding has become one of the clearest paths to monetizing AI. Anthropic’s rapid growth, driven largely by Claude Code, exemplifies this trend. Bringing Cursor into the fold was part of that strategy, and the companies were already collaborating before the acquisition closed. This month, Cursor and SpaceX jointly released Grok 4.6, a new model that scores higher on benchmarks for coding and complex multi-step agentic tasks.

Adding Cognition and its coding agent Devin—along with an enterprise customer base that includes Mercedes-Benz, Citi, and Goldman Sachs—would have provided SpaceX with another avenue to advance its AI coding push and compete for enterprise clients.

Bloomberg reports that the deal talks are no longer active, but the companies are still discussing potential collaboration—possibly with Cognition using SpaceX’s computing capacity, which SpaceX is selling to other AI players like Anthropic until it needs that capacity itself. Wu did not address this specific claim in his denial.

Cognition remains one of the largest independent AI software coding startups that hasn’t yet been acquired by a major AI model maker. In late May, the company raised a $1 billion round at a $25 billion post-money valuation, and Bloomberg reports it is now in early talks for a new funding round at a $40 billion valuation.

Cognition made headlines last year when it acquired the remaining assets of competitor Windsurf after Google DeepMind acqui-hired the startup’s CEO and top research in a $2.4 billion deal for talent and licensing rights.

Following the merger, Cognition laid off 30 employees and offered buyouts to the remaining 200 Windsurf employees. Those who stayed faced strict operational expectations, including an 80+ hour workweek and six days in the office.

Such a demanding work ethic would not be out of place at a Musk company. Musk has said he works up to 120 hours a week and often sleeps on office or factory floors.

If the acquisition had gone through, it would have significantly strengthened SpaceX’s position in the AI race, giving it access to Devin and a roster of enterprise clients, potentially reshaping the competitive dynamics among AI developers. However, with talks reportedly stalled, SpaceX’s ability to catch up in AI coding may depend on other moves, while Cognition continues to pursue independent growth with new funding.