SpaceX's bid to acquire artificial intelligence coding startup Cognition AI Inc. stalled without reaching a deal, according to reports from people familiar with the matter. The approach would have been SpaceX's second major AI takeover in recent months, following the $60 billion Cursor acquisition that closed on August 14. However, the deal talks are no longer active, with the two companies continuing discussions about a compute partnership instead, allowing Cognition to use SpaceX's computing capacity.
Cognition, founded in 2023, builds Devin, an AI agent designed to automate programming tasks for software engineers. The startup was valued at $26 billion in a May funding round and has since opened early talks for fresh financing at a valuation of at least $40 billion. As reported by Bloomberg, Cognition CEO Scott Wu has consistently maintained that the company's funding round "allows us to stay independent and continue as an independent business, which is really important for us." The startup's partnerships with Mercedes-Benz Group AG and GE Aerospace add business weight that SpaceXAI wanted, even without a takeover.
The stalled approach stands in contrast to SpaceX's $60 billion Cursor acquisition, which gave Musk's rocket firm a rival AI coding platform outright. According to reports, SpaceX's AI venture, now called SpaceXAI, has lagged competitors in selling AI tools to businesses and has also cut jobs while restructuring around the effort. Musk's SpaceX stock market debut this summer provided the company with capital to chase such deals, with the rebound following stronger-than-expected second-quarter revenue of $7.8 billion.
SpaceX shares have been volatile since the June initial public offering (IPO). The stock closed as low as $108.27 in early August before rebounding above its $135 offering price. As reported, shares traded at around $139 ahead of a share unlock that frees previously restricted insider shares for sale, covering about 319 million shares. The rebound followed stronger-than-expected second-quarter revenue and Nvidia's disclosed $21 billion stake in the company.
