SpaceX's bid to acquire Cognition AI stalls as startup targets $40 billion valuation
NEW YORK, Aug. 23. SpaceX's attempt to acquire Cognition AI Inc., valued at $26 billion in a May funding round, has stalled without a deal, according to people familiar with the matter. Talks are no longer active. The two companies are instead discussing a compute arrangement that would give Cognition access to SpaceX's computing capacity.
Key takeaways
- SpaceX's attempt to acquire Cognition AI, valued at $26 billion in a May funding round, has stalled with no active talks.
- Cognition has opened early talks for new financing at a valuation of at least $40 billion, reducing its incentive to sell.
- The two companies are now discussing a compute arrangement giving Cognition access to SpaceX's computing capacity.
- Cognition, founded in 2023, builds Devin, an AI agent that automates programming tasks for software engineers.
- SpaceX's AI unit, SpaceXAI, had sought Cognition's enterprise ties, including partnerships with Mercedes-Benz and GE Aerospace.
NEW YORK, Aug. 23. SpaceX's attempt to acquire Cognition AI Inc., valued at $26 billion in a May funding round, has stalled without a deal, according to people familiar with the matter. Talks are no longer active. The two companies are instead discussing a compute arrangement that would give Cognition access to SpaceX's computing capacity.
Cognition, founded in 2023, builds Devin, an AI agent that automates programming tasks for software engineers. The startup has since opened early talks for fresh financing at a valuation of at least $40 billion, the people said. The higher price tag gave it less incentive to accept an offer.
Chief Executive Officer Scott Wu has been consistent about the company's direction, publicly and in conversations with investors. He told Bloomberg in May that the funding round "allows us to stay independent and continue as an independent business, which is really important for us."
What SpaceXAI was after
SpaceX, Elon Musk's rocket company, went public this summer, and the IPO gave it capital to pursue acquisitions. Its AI division, now operating as SpaceXAI, has trailed competitors in selling AI tools to businesses and has cut jobs in a restructuring. Cognition's existing partnerships with Mercedes-Benz Group AG and GE Aerospace gave the unit enterprise relationships it wanted, people familiar with the matter said, even without a full takeover closing.
The stalled approach would have been SpaceX's second major AI acquisition in recent months. Its $60 billion purchase of Cursor, a rival AI coding platform, closed on August 14.
SpaceX shares priced at $135 in the offering and fell as low as $108.27 in early August before recovering. Shares were trading around $139 ahead of a share unlock covering about 319 million previously restricted insider shares. Second-quarter revenue came in at $7.8 billion, above expectations. Nvidia has disclosed a $21 billion stake in the company.
Whether SpaceX revisits a bid for Cognition may depend on where the startup's next funding round sets its price.