According to Business Insider, Elon Musk’s xAI has held talks in recent weeks with French AI startup Mistral and coding platform Cursor regarding a potential three-way partnership. The discussions took place just a day before SpaceX announced a massive deal granting it an option to acquire Cursor for $60 billion, reflecting Musk’s push to close the gap with Anthropic and OpenAI in AI programming and agentic capabilities.

A Coalition of Capabilities

The proposed collaboration would unite three distinct advantages: Mistral’s cutting-edge model architecture, Cursor’s popular developer tools, and xAI’s massive inference infrastructure powered by the Colossus supercomputer. Musk himself admitted at a recent conference that Grok, xAI’s chatbot, is "currently lagging in the programming sphere," underscoring the strategic logic behind the partnership.

The talks build on rapidly deepening ties between all three parties. On April 14, Business Insider reported that xAI began providing compute power to Cursor, with the coding startup using tens of thousands of xAI GPUs to train its latest Composer 2.5 model. Then, on April 22, SpaceX officially solidified the relationship, announcing a deal involving $10 billion in joint development funding and an option for a full acquisition of Cursor by the end of the year.

Mistral Connection Deepens Through Key Hire

A high-profile hire has already strengthened the link between xAI and Mistral. In March, Devendra Singh Chaplot, one of Mistral’s founding members who worked on training the French startup’s models, announced he was joining xAI and SpaceX to work directly with Musk on building "superintelligence." Chaplot, an alumnus of IIT Bombay and Carnegie Mellon University with a background at Meta AI, brings expertise in LLM pre-training and embodied AI.

Mistral, backed by ASML and Nvidia, has built a reputation for developing competitive models with limited compute resources. In March, the Paris-based company raised $830 million in debt financing to build a European data center.

Competitive Landscape

For Cursor, these arrangements resolve a critical bottleneck. "We have long wanted to significantly scale our model training efforts, but we have been held back by a lack of compute," the startup stated in a blog post regarding the SpaceX partnership. In November, the company reached $1 billion in annual recurring revenue (ARR) and is reportedly in talks to raise $2 billion at a valuation exceeding $50 billion.

While the three-way talks are in early stages and a formal agreement is not guaranteed, the combination of Mistral’s model expertise, Cursor’s developer adoption, and xAI’s infrastructure represents a fundamental shift in the race to challenge Anthropic and OpenAI in one of AI’s most promising product niches.