SpaceX Makes a $60 Billion Bet on Its AI Future

SPEAKER_1 (0:00)

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Alex Ossola (0:33)

The US will allow Iran to immediately start selling oil as part of the deal to end the war. Plus, why SpaceX is spending $60 billion on the AI coding agent Cursor.

Becky Peterson (0:44)

SpaceX thought it was a rocket company, thought it was a satellite company, and it's going to keep doing both of those things, but its new future is in AI.

Alex Ossola (0:54)

And is Qualcomm actually a bargain among AI chip makers? It's Tuesday, June 16th. I'm Alex Ossola for The Wall Street Journal. This is the PM Edition of What's News, the top headlines and business stories that moved the world today.

The Trump administration says the agreement to end the war between the US and Iran was signed electronically on Sunday. No text has been released. Though, speaking today from the G7 meeting in France, President Trump said that could soon change.

Donald Trump (1:29)

But I will, actually, I'll not only release it, I'll probably have a press conference and read it to you word by word so that the press covers it accurately because it's a very important document.

Alex Ossola (1:44)

Some of what the document contains has already begun trickling out. The Journal is exclusively reporting that the US would allow Iran to immediately begin selling oil and fuel. A senior US official says that sustained sanctions relief would depend on how Iran complies with core US demands, like opening the Strait of Hormuz and the dismantling of Iran's nuclear program. Tehran would also still not get immediate access to billions of dollars in frozen funds. WSJ National Security correspondent Alex Ward is reporting from Geneva and says this will be a financial benefit to Iran, a sensitive topic for the Trump administration.

Alex Ward (2:17)

It feels like it's basically a payment to Iran to get them to sign the deal, right? You'll hear the Trump administration say, well, there are billions of dollars in frozen assets that the US is not going to unfreeze to Iran. But in effect, by letting them sell oil, Iran will be getting revenue.

Alex Ossola (2:32)

Alex says some of Trump's supporters are skeptical of the deal.

Alex Ward (2:35)

There are a lot of MAGA folks who are supportive of the president but did want to see regime change in Iran or did want to see Iran pay a heavier price for ending the war. What we have right now is an interim agreement to continue nuclear talks.

If the US were to get massive concessions from the Iranians on the nuclear front, then okay, then you could make the case that this down payment was worth it. You'll have the critics say, well, Iran's already getting money up front from these oil sales. What incentive do they really have to engage in pretty strict restrictions of its nuclear power?

Alex Ossola (3:13)

SpaceX said today that it would buy the parent company of AI coding agent Cursor for $60 billion in stock. Cursor is a favorite tool of Silicon Valley, and it already brings in billions of dollars in annual revenue. The deal comes just a few days after SpaceX's historic IPO, and on the same day that SpaceX surpassed Amazon in market cap. At $2.66 trillion, it's now the fifth largest publicly traded company.

For more, I'm joined now by journal reporter Becky Peterson. Becky, what does SpaceX want to do with Cursor?

Becky Peterson (3:44)

Well, Cursor is a really successful app for coding.

It's competitive with Cloud Code and with OpenAI's Codex. It's going to give SpaceX the opportunity to reach these enterprise customers who want to use AI to redo how software is built at their companies.

Alex Ossola (4:03)

One of the things I remember from the lead up to SpaceX's IPO is that many of these big projections for SpaceX's future really built around its AI business. So how critical is this acquisition to SpaceX's business?

Becky Peterson (4:17)

Yeah, that's really the thing to understand about this. SpaceX thought it was a rocket company, thought it was a satellite company, and it's going to keep doing both of those things. But its new future is in AI. The acquisition of XAI in February created this whole new future product and it has this whole new vision for the company and really helps justify its big price on the stock market.