Hello, dear readers!

This is our weekly brief on the biggest AI stories, so you can take stock what AI stocks have in stock.

Today's focus — the AI race is turning into a spending race. SpaceX is paying $60 billion for a coding startup. OpenAI has hired away one of Google's most important AI researchers. And some of the biggest AI companies are getting ready to test public markets. For years, the competition was about building the best AI models. Now it's also about buying talent, products, and the resources needed to stay ahead.

Stories of the week:

SpaceX bets $60 billion on Cursor

Elon Musk is making one of the biggest AI deals ever.

Last week, SpaceX announced it would buy AI coding startup Cursor in a $60 billion all-stock deal. If the deal goes through at that price, it will be one of the largest AI acquisitions in history and shows Musk's plan to build a much larger AI business.

Cursor is not a typical startup. The coding assistant claims to generate around $4 billion in annual revenue and is reportedly used by millions of developers. That makes it one of the most popular AI coding tools available today. Combined with xAI's models and SpaceX's computing power, the deal could give Musk control over a huge part of the AI ecosystem — from chips and data centers to AI models and developer tools.

Investors were not impressed.

SpaceX shares dropped sharply after the announcement, wiping hundreds of billions of dollars from the company's market value. One reason is dilution: existing shareholders will own a smaller percentage of the company after the stock-based deal.

Another reason is more straightforward. Investors bought into a space company. Now SpaceX is spending tens of billions on an AI startup, and some shareholders are wondering what kind of company they're actually investing in.

Supporters say the deal makes sense. AI coding tools attract developers, generate useful data, and create a direct way to make money from AI models. Critics see it as another sign that AI valuations have reached extreme levels.

Google loses the man it paid billions to bring back

Few people have had as much influence on modern AI as Noam Shazeer.

He helped write the famous 2017 Transformer paper, the breakthrough that powers nearly every major AI model today. He later left Google, founded Character.AI, and became one of the best-known researchers in the industry.

In 2024, Google reportedly spent $2.7 billion to license Character.AI's technology and bring Shazeer and his team back. Less than two years later, he's leaving again — this time for OpenAI.

Shazeer wasn't just another executive. He was a co-lead of Gemini, Google's main competitor to ChatGPT. His departure doesn't suddenly put Google's AI efforts in danger, but it does mean losing one of the company's most respected AI leaders at a time when competition is heating up.

For OpenAI, the hire sends a clear message. The company isn't just competing through products anymore. It's competing for the people who can build the next generation of products.

And that may be the bigger story.

The first phase of the AI race was about building the best models. The next phase looks more like a battle for talent. Companies are spending billions on acquisitions, recruiting, and research teams. Even so, money alone doesn't seem enough to keep top researchers from leaving.

The AI IPO machine is warming up

For years, AI companies relied on venture capital firms willing to fund huge amounts of spending. Now they're preparing for a different audience.

Anthropic has filed for what could become one of the biggest tech IPOs ever. SpaceX, while not primarily an AI business, has already completed its first week as a public company and is increasingly tied to Musk's broader AI ambitions through xAI. OpenAI is widely expected to follow. Together, these listings could become a major test of how much investors believe in the future of AI.

Building leading AI models costs enormous amounts of money. Data centers, chips, electricity, and talent all come with huge price tags. Public markets can provide much more capital than private investors alone.

But public markets also bring something AI companies haven't had to deal with as much: tough questions.

Private investors can be patient. Public investors usually want answers.

Do AI revenues justify AI valuations? Will all this spending eventually lead to profits? Can today's leaders stay ahead once the hype settles down?

Those questions will become harder to avoid as more AI companies go public.

Thanks for reading AIport. Until next Monday — by then, another AI company will probably spend a small country's GDP trying to get ahead.