Background: Cursor might not be a household name just yet, but in Silicon Valley, it's red hot. The AI startup helps developers write code faster by automating large chunks of software development. And in just two years, it's skyrocketed from a $2 billion valuation to around $30 billion.  

And SpaceX is Elon Musk's satellite giant - which is gearing up for a potential IPO later this year at a valuation of up to $1.75 trillion.

What happened: SpaceX is no longer just about rockets and satellites. Remember that SpaceX had also acquired previously Elon Musk’s xAI... And Elon Musk’s xAI previously acquired Elon Musk’s X. So they all now sit under SpaceX. And now, SpaceX is eyeing its next move with Cursor.

What else: The plan is to combine Cursor’s software with its “Colossus” supercomputer (which Musk claims has the power of 1 million Nvidia H100 chips). The deal on the table could take two forms: either a $10 billion partnership or an option for SpaceX to acquire Cursor outright for $60 billion later this year. It's a bit of a "try before you buy" strategy.

What's the key learning

💡 Some of the smartest companies don't rush into mega deals. They test the waters first and only commit if it actually works.    

💡 The "try before you buy" strategy has played out before. In 2015, Microsoft partnered with LinkedIn before acquiring it for $26 billion USD. Google partnered with Twitter in the same year to integrate tweets into search results - and walked away when it didn't stack up.

💡 Strategic partnerships can act as a real-world trial run... giving companies real insight into strategic fit, product integration, and long-term value before committing billions in capital.