Just weeks after SpaceX secured an option to acquire Cursor for $60 billion, Cursor employees have started moving into xAI's office. According to The Information, Cursor staff are not only discussing business with xAI employees but have co-hosted internal all-hands meetings with xAI research head Aman Madaan.
This Cursor incursion comes as xAI continues to hemorrhage talent. Last Friday, xAI laid off roughly 10 members of its Grok model team and recent weeks saw cuts to some data center staff. At the executive level, Devendra Chaplot — a founding member of Mistral AI who was hired in March as a major coup and reported directly to Elon Musk — has now left after just one month.
The personnel upheaval validates Musk's earlier declaration that he would "rebuild xAI from scratch." After folding xAI into its parent company (renamed SpaceXAI) and subleasing its first data center to Anthropic, Musk is now trying to remake the original business using the Cursor team. But the deal is far from certain: if Musk ultimately walks away from the acquisition, he would owe a breakup fee of up to $10 billion. Meanwhile, Cursor remains focused on improving its own models rather than immediately kicking off joint development as xAI had envisioned. The pain of xAI's restructuring, coupled with the debt burden of this expensive acquisition, is adding uncertainty to SpaceX's upcoming IPO.