A $10 Billion Call Option

<p>SpaceX announced a partnership with Cursor today : a $10 billion collaboration with a $60 billion acquisition option later this year.<sup id="fnref:1"><a class="footnote-ref" href="https://tomtunguz.com/index.xml#fn:1">1</a></sup></p> <p>The most important market in AI isn&rsquo;t chatbots, search, or image generation. It&rsquo;s coding. Cursor is the fastest-growing developer tool in history, at $2 billion in annualized revenue.<sup id="fnref:2"><a class="footnote-ref" href="https://tomtunguz.com/index.xml#fn:2">2</a></sup></p> <p>To understand the deal, understand the stack. Winning in agentic coding requires three layers. Anthropic, OpenAI, &amp; Google each own &amp; operate compute, models, &amp; distribution.</p> <!--[if mso | IE]> <v:rect xmlns:v="urn:schemas-microsoft-com:vml" fill="true" stroke="false" style="width:900px;height:400px;"> <v:fill type="tile" src="https://res.cloudinary.com/dzawgnnlr/image/upload/w_900,h_400,c_fill,g_auto,q_auto,f_auto/chjwkjeufaynoyy0y3t8" /> <v:textbox style="mso-fit-shape-to-text:true" inset="0,0,0,0"> <![endif]--> <div style="margin: 0 auto;"><a href="https://res.cloudinary.com/dzawgnnlr/image/upload/q_auto,f_auto/chjwkjeufaynoyy0y3t8" style="display: block; text-decoration: none;" target="_blank"><img alt="ai-stack" height="560" src="https://res.cloudinary.com/dzawgnnlr/image/upload/w_2520,h_1120,c_fill,g_auto,q_auto,f_auto/chjwkjeufaynoyy0y3t8" style="display: block; width: 100%; height: auto; border: 0; cursor: pointer;" width="1260" /></a></div> <!--[if mso | IE]> </v:textbox> </v:rect> <![endif]--> <p>Cursor has the distribution. xAI has massive compute. The Colossus data center in Memphis houses 100,000 NVIDIA H100 GPUs, making it one of the largest AI training clusters in the world. xAI has Grok models as well that were broadly used, but whose popularity collapsed earlier this year.</p> <!--[if mso | IE]> <v:rect xmlns:v="urn:schemas-microsoft-com:vml" fill="true" stroke="false" style="width:800px;height:45