xAI

In February 2026, Elon Musk merged xAI into SpaceX, shifting the group's driving narrative toward AI and away from launches and Starlink. The timing is legible: SpaceX was heading into an IPO at a reported valuation of 1.75 to 1.8 trillion dollars, and Wall Street pays more for AI revenue than for aerospace revenue. xAI itself reportedly lost 6.4 billion dollars in 2025, according to the Financial Times.

Two events since then show what the merged entity does with that position. On 21 April 2026, SpaceX and Cursor announced an agreement giving SpaceX the right to acquire Cursor for 60 billion dollars, or to pay 10 billion for a continuing compute and collaboration partnership. It attaches Cursor's IDE and Composer models to xAI's Colossus cluster in Memphis, described by SpaceX as equivalent to a million H100 GPUs. Mitch Ashley of The Futurum Group reads the deal as Cursor moving off a substrate where compute is priced against it onto one where the price is internal.

On 15 May 2026, xAI open-sourced xai-org/x-algorithm, the For You ranking stack behind X. The code exposes the shape: Phoenix, a transformer derived from Grok-1, scoring each candidate across 19 distinct actions. It withholds the numbers. Every weight sits behind `crate::params::*` with no `params.rs` shipped.

An organization carrying a reported 6.4 billion dollar annual loss now supplies the AI story underwriting a 1.75 trillion dollar listing, inside a capital network that circulates among a handful of the same players.