Musk Is Chasing the Smart AI Money With a $60 Billion Deal

One of the most fundamental ingredients of Silicon Valley success is the practice of dominating a market to rapidly achieve massive scale. The strategy has a name, blitzscaling, coined by billionaire venture capitalist Reid Hoffman, and it has created unfathomable wealth for companies in social media, ride-hailing and streaming. But not so much artificial intelligence.

Elon Musk’s decision to enter an expensive partnership with the company behind AI-assisted coding tool Cursor, in which his SpaceX will pay $10 billion for the startup’s work or buy it for $60 billion, shows how futile the blitzscaling strategy can be when selling services like Musk’s AI assistant Grok to consumers. Ditching that mantra for a focused assault on business customers could be critical in getting the massive initial public offering valuation Musk wants for SpaceX.