* X will have a total of ~2GW of GPU sometime this year largely not doing much outside of 'grok is this true'
* despite no longer being in vogue with consumer devs Cursor still has a lot of developer data that can assist in building a model
* Cursor have decent enterprise relationships (while for xAI it is ~zero) and that's where the real revenue for llms + agents is
* Cursor are paying retail for tokens and competing against the frontier model co's who are also their suppliers. Not sustainable (hence their in-house composer model).
* Cursor the product covers the gamut from lovable-style prompt-to-app, an IDE, cli and bugbot
* X are using "x bucks" to pay for a potential later acquisition which are arguably overvalued based on the space x IPO hype
Option there to give X a window to make it work, otherwise walk away with a $10B breakup fee for access to it's data
> largely not doing much outside of 'grok is this true'
Hey now, don't forget about it's super important other use, taking innocent photos of people and regenerating them in less clothing and compromising positions.
it's much funnier now, that by putting it behind a paywall, they're explicitly saying "it's okay for you to do this, you just have to purchase a license first"
Photoshop has been able to do that for 25 years. Do people realize that AI doesn’t magically know what their real bodies look like? AI is just pasting the averaged body parts from every porn image on top of what you were wearing. I know people love to be offended, but it’s weird to me that they’ve made up a right to not have someone privately mess with an image that has your face in it.
Maybe if this tech were completely secret and this was 1997, so a video of a naked Bill Clinton high-fiving Saddam Hussein in a hot tub was likely to shock the world, then it would be a big deal. But everyone knows all images (and especially surprising ones) are likely to be AI, I’m asking sincerely, does it really matter if people make fake photos for wanking purposes?
I've had hundreds of AI-powered vendor tools come across my desk as part of my job, and I have yet to see a single one that uses Grok. I'm also not aware of any publicly announced customers for Grok's enterprise offering. The Grok Enterprise website doesn't list any customers.
For Enterprises it's way easier to delist Cursor from the list of used tools than to have a relation with someone known publicly for neofascist aspirations.
xAI is not, and was not that bad, it's just everybody ignores it for anything serious due to obvious reasons.
I hate Musk, but Grok is not a bad LLM. It's very useful for tracking down old magazines that I'm looking for, which are public domain or copyright orphans. Often the major players will outright reject searching places like archive.org as they immediately assume you are trying to commit some level of copyright infringement. With Grok it'll either just do it, or do it with a mild prod or jailbreak.
You've literally got tools like opencode that are MIT licensed. Most of those points X could do on their own or are things that make this attractive for cursor not X.
e.g. Need developer data? Use some of that spare GPU compute, hand out free top end model coding access for a bit and you'll very rapidly have developer data
Yes I think you're right. Reinforcement learning is extremely compute heavy, which cursor doesn't have. And X.ai doesn't have the coding agent data anthropic/OpenAI has, but does have the compute.
However, one thing in AI is that while the usage goes up extremely quickly, it tends to go down just as fast. I know a lot of companies that are in the process of switching from Cursor to Claude Code, so in 6-12 months I'm not entirely sure of the data quality/quantity.
Also I think it is telling that they are calling them SpaceX not X. The X brand is absolutely toxic, especially in enterprise.
I think you're right. Other providers can offer coding subscriptions that use in-house models, and this sets the stage for a Grok coding plan that's built in to Cursor.
$60 billion seems expensive, but it gives them a much better chance at competing in the market than if they started their own harness from scratch.
Absolutely no enterprise - I work in enterprise cloud consulting - absolutely no company would trust Grok with their IP compared to Anthropic or OpenAI with Musk’s reputation on how he runs his businesses.
Anthropic just tolerates the money losing developers who pay $20/$200 for subscriptions.
They'll sign a contract, and the contract will be very clear about whether using user prompts as training data is allowed or not. They're not going to care much about reputation; they'll care about the terms they sign with.
I wouldn't trust a contract from one of Elon's companies unless they were willing to put in escrow an amount that would make me whole in case of a breach on their side. (And that amount would be quite large in the case of a potential breach involving using prompt data for training.)
Maybe the play here is a way to sneak sneak Grok into enterprise by calling it Cursor. Or they'll just give up on it and run Cursor's fine-tuned Kimi on Colossus.
I think it also represents a bet that in some sense Cursor's model capabilities are resource limited rather than talent limited. If that's true, $60B will end up being a bargain. If not true, well it's an expensive lesson but that's the nature of things.
Forgot that claude is burning good will from it's own capacity constraints, leading to periods of 'dumbness'. It's a catalyst to cause me and others to switch back to cursor if they can get their act together
> forgot to consider whether all this is worth $60B
I see two possibilities:
(1) SpaceX is paying with stock; and
(2) the $60bn pay-out is (a) conditional or (b) never going to be exercised—it was a stalking horse for negotiating the $10bn terms, which gives SpaceX everything it actually wants.
$1B to $2B ARR in a few months with projection of $6B ARR by years end. If xAi wants to have it's own tools just like OpenAI and Anthropic, then it's not an unusual move.
Extrapolating from a few months to a full year and calling it AnnualRecurring Revenue is one of modern startup valuation gimmicks that I cannot not laugh at.
Sometimes it helps to go back to the basics to understand company performance: money in, money out?
Sure, but early profit rarely tells the whole story. They already sell to half the fortune 500 and enterprise is sticky. Gains in efficiency, like a discount on data center access, can be remarkable for their profit outlook.
in these cases arr = annual run rate, commonly used when your revenue is either going vertical (cursor - good) or your revenue is choppy and full of short term projects (mercor - bad)
> Cursor still has a lot of developer data that can assist in building a model
Their composer model is seriously good. I’ve been eyeing a cursor sub just to use it in OpenCode. They have a nice moat here.
> Cursor have decent enterprise relationships (while for xAI it is ~zero)
That has a reason. Those enterprise relationships are almost certainly going to sour at least a bit, if not for Musk‘s toxic image then for his erratic behavior.
Just to point it out, Cursor has not made any good models themselves. Composer 2 is Kimi K2.5, and they tried to pass it as their own until people noticed that the api specified it as Kimi.
I’ve tried Kimi a bit (not much to be fair) and didn’t find it to be that great. Composer feels more „real world“ capable to me, which is not a big surprise since Cursor has all the data to tune it.
Yeah, Composer 2 is legitimately so impressive. It is my daily driver right now both on professional and personal projects. I only find myself reaching for 5.3 Codex/GPT 5.4 when exploring a lot of technical documentation or code and for Sonnet/Opus when working on UI. Everything else is Composer.
Even if it wasn't for Musk, are these relationships really worth so much?
There is a certain value in being on the approved vendor list, but it seems to me that there really isn't a lot of vendor lock-in.
I think most people could switch to opencode, claude code or codex pretty easily.
Maybe these relationships would be worth a lot if companies signed long-term contracts, but I doubt many did.
* X will have a total of ~2GW of GPU sometime this year largely not doing much outside of 'grok is this true'
* despite no longer being in vogue with consumer devs Cursor still has a lot of developer data that can assist in building a model
* Cursor have decent enterprise relationships (while for xAI it is ~zero) and that's where the real revenue for llms + agents is
* Cursor are paying retail for tokens and competing against the frontier model co's who are also their suppliers. Not sustainable (hence their in-house composer model).
* Cursor the product covers the gamut from lovable-style prompt-to-app, an IDE, cli and bugbot
* X are using "x bucks" to pay for a potential later acquisition which are arguably overvalued based on the space x IPO hype
Option there to give X a window to make it work, otherwise walk away with a $10B breakup fee for access to it's data