A Code Editor. Sixty Billion Dollars. A Rocket Company.
The AI coding arms race has officially lost the plot — and builders are the only ones winning.
Hey all, it’s me Real John. So today I have to talk about SpaceX trying to buy cursor… but I’m going to do another one this week, mainly because there is so much going on in my head I really want to share. AI is getting so good right now, and its getting more fun everytime I start playing with it. The next article is about using AI for things that are not coding. Engineers are the default AI users, but what if they put away their “I’m a coder” mentality and thought like a human. That’s coming soon… but for now let’s talk about Elon trying to buy cursor… and why? Oh, eight of spades today, if you know you know. Oh yeah, working on my own version of the ambitious card… should have a video of that soon… Card magic is so much fun… ok, on to the newsletter.
Let me get this straight.
SpaceX — the company that builds actual rockets that go to actual space — just tried to buy Cursor for sixty billion dollars.
Not a satellite network. Not a propulsion system. A code editor.
Meanwhile, Cognition AI — the company behind Devin, the “AI software engineer” that demos great and ships questionable — is raising money at a $25 billion valuation.
These are not typos.
I’ve been in software for 30 years. I’ve seen the dot-com bubble inflate and explode. I watched the mobile app gold rush. I survived the blockchain “revolution.” I know what a fever dream looks like. And this, my friends, is a fever dream wearing a hoodie and calling itself a developer ecosystem play.
The Tools Are Real. The Numbers Are Not.
Here’s the thing I want to be clear about: I use Cursor. I like Cursor. It’s genuinely useful. Claude Code is in my daily workflow. I built statussage with Tempo Labs. These tools are real and they make me faster.
But sixty. Billion. Dollars.
For context, that’s more than the GDP of several countries. For a code editor. That autocompletes your functions and sometimes hallucinates your variable names.
The SpaceX deal isn’t even a clean acquisition — it’s a $10 billion collaboration with an option to buy Cursor for $60B “later this year if things go well.” Which means someone looked at a developer tool that’s been around for a few years, does not have a publicly disclosed revenue number anywhere near that territory, and said, “yeah, let’s put a rocket company’s balance sheet behind that bet.”
Meanwhile, Devin — Cognition’s flagship AI agent — launched to enormous hype in 2024 promising to be a fully autonomous software engineer. Real engineers tested it. The results were... instructive. It could handle simple, well-defined tasks. It struggled badly with anything that required actual context, judgment, or debugging a gnarly production issue. The thing that every senior engineer gets paid for.
Now they’re raising at $25 billion.
The demos are incredible. The gap between the demo and production is a canyon.
What’s Actually Happening Here
This isn’t about tools. This is about distribution and control.
SpaceX wants to own the coding layer because whoever owns the coding layer owns the workflow. Elon already has xAI. He has Grok. He has the Colossus supercomputer. A $60B Cursor acquisition is a vertical integration play — own the IDE, own the model, own the compute. Lock in developers at the wrist.
Same logic drove OpenAI to acquire Astral (the Python tooling team behind Ruff and uv). Same logic has Google dropping $10 billion into Anthropic while also being their cloud provider. The frontier labs are becoming infrastructure, and the infrastructure players are trying to become the frontier.
It’s a land grab. Everyone is planting flags everywhere.
And here’s the dirty secret: none of this makes the tools better for you. Vertical integration makes things better for the acquirer’s balance sheet. For builders? It means lock-in, pricing power shifts, and the slow erosion of the “open” in open source.
What You Should Actually Do
Ignore the valuation circus. Not metaphorically — literally stop reading the funding announcements like they mean something for your work.
Here’s your actual checklist:
Use the tools that ship your product. Not the tools with the biggest fundraise.
Don’t build your stack around a single vendor. The integration wars are coming. Hedging costs nothing now and saves everything later.
Your moat is execution, not tooling. Cursor at $60B doesn’t make your idea better. Shipping makes your idea better.
Read the demo skeptically. Every AI coding tool demos on greenfield, well-scoped problems. Your codebase is a decade of decisions, tribal knowledge, and that one function Todd wrote in 2019 that nobody touches.
Keep your costs grounded. I built Cash Critters for $50/month. statussage runs lean. The arms race happening at the frontier has nothing to do with what it costs you to ship something useful today.
The tools are commoditizing. DeepSeek dropped V4 today — top-tier coding benchmarks, fraction of the cost. The model layer is collapsing in price while the equity layer inflates in absurdity. Those two things are moving in opposite directions, and builders benefit from exactly one of them.
The companies spending billions on valuation theater are betting you’ll be impressed enough to pay attention to them instead of shipping.
Don’t give them the satisfaction.
Go build something amazing.
John Mann is the founder of Startups and Code LLC, a software engineering executive, and the guy who built Cash Critters for $50/month because constraints are a feature, not a bug. Subscribe for weekly takes on AI, startups, and building things that matter.