00:00 Speaker A
Okay, that’s a plus, so explain to me why rocket company SpaceX is willing to potentially spend $60 billion on an AI startup.
00:07 plus
I mean, first of all, right?
00:09 Speaker A
Yeah.
00:09 plus
How many times have you seen a company about to IPO get acquired for $60 billion? You know, someone online said that. I was like, oh, that’s insane. But basically, SpaceX, the rocket and satellite company,
00:20 Speaker A
Hmm, hmm.
00:20 plus
Remember when they acquired xAI? xAI is Musk’s AI company, so to speak. Well, you know they created Grok and chatbots and things like that, but what happened there was they needed software like Vibe coding. It’s the same thing that ChatGPT has in Codex and, er, Anthropic has in Claude.
00:35 plus
This is how they get it, and Cursor AI is their product. I think it’s one of the best varieties in that field. So, buy the option for $60 billion, or collaborate for $10 billion in the future, that’s kind of what they say on TV.
00:54 Speaker A
Well, that’s kind of interesting, so could you explain how this deal works?
00:57 plus
I think the meaning of what I’ve read is that they have an option to buy it out for 60 billion, but if they don’t buy it there’s a $10 billion penalty. I think that’s what it means. Um, but you know, we’re not going to do that, but we still want you to work with us, right? So, how much will the penalty be? But I think that’s the current trend in this world.
01:13 Speaker A
But you’re thinking, I think this is xAI, are you saying that you think this is like xAI lagging behind its rivals and this is something Musk wants to catch up to?
01:19 plus
Well, they’re clearly the fourth or third best AI company from a consumer perspective and so on. And this is their this is their B2B play. This is to get software engineers involved. With Cursor AI, you can onboard many clients. But, you know, look at the post where SpaceX said, like us, they have 100 million, I’m sorry, 1 million H100 equivalent Colossus training supercomputers.
01:43 plus
That means the Colossus facility in Tennessee has tens of billions of dollars worth of supercomputing computing power, right?
01:46 Speaker A
Hmm, hmm.
01:47 plus
I have this buildout. Adding Cursor AI adds more software. If so, it may make sense from the perspective of large-scale corporate activities. I mean, getting that is a pretty big deal.
01:57 Speaker A
How much do you also think, is Musk the only one who has this kind of grand vision, and he’s like, in that vision, space and AI and AI are just so intertwined.
02:07 plus
Yeah, I mean, he was talking about using AI to decide where to put data centers in orbit. How do you launch them? How does deciding all these things require significant computational power? I mean, we’re talking about math here now that I don’t understand, right? So
02:18 Speaker A
right.
02:19 plus
I think that’s exactly right. I think if you’re going to have a rocket company, if you’re going to have a satellite company, if you’re going to have a data company, you need an AI component. Well, that’s part of the whole thing, right? Because we’re talking about data centers in space, right?
02:27 Speaker A
Hmm, hmm.
02:27 plus
Maybe there’s also Cursor AI, xAI technology.
02:32 Speaker A
So we were talking about how SpaceX is waiting for a big public rollout, right? And then this headline drops.
02:38 Speaker A
Do you think there will be any change at all that will impact the way investors think? If investors are excited to put their capital to work, does that change the narrative, the narrative at all?
02:47 plus
Well, I think III, I think so, but I don’t think it’s that different. I think there’s probably still the same frenzy of anti-anti-this-this-this-this movement that we had before. But you have to ask yourself what are you buying with SpaceX here, right? So, first, there was the big merger with xAI. People were wondering, why Musk, is this a way to port over all the losses from xAI and take it off the books and push it onto SpaceX?
03:06 plus
They’re probably still making money through things like Starlink. Well, that’s why this is happening? Well, then would I be happy running an xAI company that spends a lot of money, pays a hefty premium for an IPO, and blows a ton of cash? Someone called it a money furnace, right? Like Mr. Musk’s money furnace. But on the flip side, this acquisition of Cursor could help that business.
03:20 Speaker A
Hmm, hmm.
03:21 plus
Everything is going to get better and we’re going to have a really integrated play in the future of everything, right? Space, orbital data centers, Starlink, and now you can have your full suite of AI applications.
03:30 Speaker A
Okay, thanks, plus. appreciate. Of course, we’ll talk about Tesla’s earnings later in the show. According to Polymarket odds, Tesla has about a 24% chance of winning when it announces after the close. To learn more about Polymarket’s odds, scan the QR code on your screen to visit Yahoo Finance’s Prediction Markets Hub, powered by Polymarket.
