Cognition CEO denies SpaceX acquisition talks after $60B Cursor deal

SpaceX's attempt to acquire AI coding startup Cognition was rejected by CEO Scott Wu, who said the company is not for sale, as the startup targets a $40 billion valuation.

"We are not for sale, and we haven't been in talks," Wu said on X, disputing a Bloomberg report that SpaceX had approached the company about a potential acquisition.

The rejection follows SpaceX's $60 billion acquisition of Cursor, which closed Aug. 14. Cognition raised $1 billion in May at a $25 billion post-money valuation and has opened early talks for a new round at $40 billion. The startup's Devin AI agent counts Mercedes-Benz, Citi, and Goldman Sachs among enterprise clients.

The failed approach highlights the intensity of consolidation in AI coding tools, where Anthropic's Claude Code has driven rapid growth. SpaceX, which went public in June with a market cap peaking near $2.3 trillion, has told employees AI will be 99% of company value within four to five years.

SpaceX's interest in Cognition is part of a broader push to monetize AI after its blockbuster IPO. The company acquired Musk's xAI earlier this year and has been selling computing capacity to other AI players, including Anthropic, until it needs that capacity for its own models. Musk told SpaceX employees last week that AI will be 99% of the company's value in four to five years, but the xAI business remains early-stage and has fallen behind competitors in enterprise sales. The company has also had to contend with its chatbot Grok's controversies, including last year's antisemitic outbursts and this year's nonconsensual sexual imagery scandals, as it tries to win over enterprise customers.

AI-assisted coding has emerged as one of the clearest revenue paths for AI companies. Anthropic's growth, fueled largely by Claude Code, demonstrates the demand. Cursor and SpaceX jointly released Grok 4.6 this month, a model that scores higher on benchmarks for coding and complex multi-step agentic tasks. Adding Cognition and its Devin agent would have given SpaceX another way to deepen its push into AI coding and compete for enterprise customers.

Cognition's Independence Strategy

Cognition, founded in 2023, has been deliberate about staying independent. Wu told Bloomberg in May that the $1 billion funding round "allows us to stay independent and continue as an independent business, which is really important for us." The startup's trajectory — from a $25 billion valuation in May to early talks at $40 billion — gives it less reason to sell.

The company also has a track record of consolidation. Last year, Cognition acquired the remaining assets of competitor Windsurf after Google DeepMind acqui-hired the startup's CEO and top researchers in a $2.4 billion deal for talent and licensing rights. After 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-plus-hour workweek and six days in the office — a wartime work ethic that would not be out of place in a Musk company.

Compute Partnership in the Works

While the acquisition talks have ended, SpaceX and Cognition continue discussing a compute partnership, according to Bloomberg. Cognition could use SpaceX's computing capacity, which the company sells to other AI players like Anthropic. Such an arrangement would let SpaceX reach AI coding companies as an infrastructure provider without owning the application layer. Wu did not address this specific claim in his denial.

SpaceX shares have been volatile since the June IPO, closing as low as $108.27 in early August before rebounding above the $135 offering price. The stock traded around $139 ahead of a share unlock covering about 319 million shares. Nvidia disclosed a $21 billion stake in the company, and SpaceX reported stronger-than-expected second-quarter revenue of $7.8 billion.

For investors, the failed acquisition keeps Cognition independent as one of the largest remaining standalone AI coding startups. The $40 billion valuation target reflects strong demand for AI engineering automation. SpaceX's AI commercialization strategy faces headwinds in enterprise sales, and the company may need to rely on partnerships rather than acquisitions to build out its AI coding presence. Whether a revised offer emerges may depend on how Cognition's next funding round reshapes its price tag.

This article is for informational purposes only and does not constitute investment advice.