The Morning Download: SpaceX Joins All-Out Battle for Enterprise AI

Good morning. In recent decades, consumers have led the adoption of many technological innovations, from the smartphone to social media. AI adoption is being led by large companies and organizations, collectively known as the enterprise. That critical market was a big factor in SpaceX’s deal to acquire Cursor, the Wall Street Journal reports.

SpaceX reached a $60 billion all-stock deal to buy autonomous coding agent Cursor, a San Francisco startup that built a product used by the biggest AI labs and companies like Nvidia, British Airways and Deloitte.

(Note: Deloitte is a sponsor of CIO Journal.)

Elon Musk has admitted that SpaceX lags rivals OpenAI, Anthropic, Google and Chinese open-source models in the race to build out AI, according to the Journal. The combination of capital raised from SpaceX’s IPO with cash, talent and technology from the Cursor deal will help fund SpaceX in that battle.

Cursor offers a full integrated development for coders, who can use it to access Cursor models or models from other companies. It brings ample resources in a prized front in that war—the enterprise and professional markets characterized by significant and steady streams of revenue—as well as sophisticated users who can provide valuable feedback to developers.

SpaceX has also started renting out its data-center capacity to rivals such as Anthropic and Google to bring in revenue, which could drive $26 billion a year in revenue between 2027 and 2029 during a period in which the AI industry faces a computing crunch.

The Journal said Cursor brings in a steady stream of cash, with annual recurring revenue of $4 billion. Cursor, led by well-regarded CEO Michael Truell, can also help SpaceX as it competes for talent. During pre-IPO meetings with investors in April, SpaceX officials said the company would build out its xAI enterprise sales team, people familiar with the matter told the Journal.

So far, the reliability of the enterprise revenue engine is holding steady for AI companies as they fund massive development costs for their models, which demand vast spending on compute infrastructure and energy.

AI boom turns to convertible-bond market. U.S. companies financing their AI ambitions are tapping the convertible bond market at near-record levels, the WSJ reports. These instruments let investors swap their debt holdings for stock if the shares rise to a designated price.

So far this year, U.S.-listed companies including CoreWeave and Microchip Technology have issued about $54 billion worth of convertible bonds, up 43% from the same period in 2025, and the highest year-to-date volume since the start of the Covid-19 pandemic, according to Dealogic data going back to 1995.

• Amazon is backing a $310 million funding round for Odyssey ML, developer of so-called world models, FT reports. As part of the deal, Odyssey will use AWS as its preferred cloud provider and its latest Trainium chips. The round values Odyssey at $1.45 billion and also drew participation from the investment arms of Nvidia and AMD.

• Snap co-founder and CEO Evan Spiegel hailed the company's newly unveiled $2,195 augmented reality glasses as the next "major leap in computing," the Los Angeles Times reports.

• The Justice Department has asked a federal court in Mississippi to dismiss an NAACP lawsuit targeting Elon Musk's xAI, arguing the company supports "vital national security missions," the New York Times reports. The NAACP alleges that xAI is illegally operating dozens of gas-burning turbines, in violation of the Clean Air Act.

• A decision by Justice Department senior leadership to close an investigation of Paramount’s bid for Warner Bros. Discovery surprised career antitrust investigators who were learning towards a lawsuit, the WSJ reports. 

• Apple plans to launch camera-equipped AirPods, a foldable iPhone, and a new iPhone model in late 2027, Bloomberg reports. The AirPod cameras won't capture photos or video; instead, they'll function as sensors, feeding visual context to Siri to power AI-driven interactions with the assistant.

This September 14–15, technology leaders will gather in New York City for the WSJ Technology Council Summit to explore how enterprise AI is moving from experimentation to measurable business value. Join the Technology Council and be part of the conversations shaping the future of leadership, as executives tackle AI deployment, cybersecurity, evolving technology policy, enterprise transformation and the strategies driving the next generation of business innovation.

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Follow Isabelle Bousquette on LinkedIn, Instagram, X, and TikTok for more behind the scenes on her tech and AI coverage, and lately, her contributions to the WSJ Leadership Institute's new Executive Resilience series, where she's profiling America's top execs about their fitness and wellness habits.

Follow Belle Lin on LinkedIn and X for her latest reporting on enterprise technology and AI.

Steven Rosenbush is chief of the enterprise technology bureau at the WSJ Leadership Institute. He also has a column. You can follow him on LinkedIn.

Tom Loftus is the editor of The Morning Download. He suggests following Isabelle, Belle and Steve on their various social channels. But if you insist, here's his LinkedIn.