SpaceX Tried to Buy Cognition as AI Coding Startups Attract Billion-Dollar Bets

SpaceX approached Cognition, the artificial intelligence startup behind the Devin coding agent, about a potential acquisition, Bloomberg reported on Aug. 19. The approach would have expanded SpaceX’s push into software and enterprise AI after its broader efforts to compete with OpenAI and Anthropic.

The discussions did not result in an announced transaction. Cognition is separately seeking new capital at a valuation of about $40 billion, while The Wall Street Journal reported that the company raised about $500 million to advance its code-generation business. The overlapping developments show how quickly leading AI coding companies have become acquisition targets and fundraising magnets.

Cognition’s latest financing activity places a sharp premium on the company’s earlier funding milestones. The startup raised $1 billion at a $26 billion valuation in May, according to Finance.yahoo, and new discussions have centered on a valuation of at least $40 billion tied to a reported $1 billion annualized revenue run rate.

That valuation reflects investor demand for software agents that handle more than code completion. Cognition’s Devin is designed to work through software projects with a high degree of autonomy, building on large language models and reinforcement learning. The company previously raised $21 million in 2024 as it positioned Devin as an autonomous development assistant, according to Mexicobusiness.

AI coding agents have become one of the clearest business applications for generative AI because companies can connect them directly to engineering work, software output and productivity budgets. Cognition’s Devin represents the autonomous-agent approach, while the broader market includes tools that assist programmers inside existing development environments.

The commercial focus gives Cognition strategic value beyond its model technology. A coding agent can generate recurring enterprise revenue, gather feedback from professional developers and become embedded in internal workflows. That combination helps explain SpaceX’s interest as the company builds an AI portfolio around xAI and seeks a stronger position against established rivals.

SpaceX’s reported approach to Cognition follows a separate $60 billion transaction involving Anysphere, the company behind Cursor, according to NBC News, Finance.yahoo and Channelinsider. Those accounts describe Cursor as a leading AI coding platform and say the deal was structured as an all-stock acquisition, although the supplied accounts conflict with the stated focus on Cognition and contain inconsistent dates.

The Cursor reporting still provides useful market context: large AI companies are pursuing coding products as a route into enterprise software. SpaceX’s acquisition of xAI in February, cited by Finance.yahoo, also points to a strategy that links computing infrastructure, foundation models and application software. A Cognition acquisition would have added Devin’s autonomous coding capabilities to that stack.

Cognition’s fundraising path will determine whether the company remains independent, brings in a strategic partner or becomes an acquisition candidate again. A $40 billion valuation would make the startup one of the most valuable private AI software companies, while the reported $500 million raise would give it capital to expand products, sales and infrastructure.

The central test is revenue quality. A reported $1 billion annualized run rate provides a powerful growth signal, but enterprise coding agents still face questions around accuracy, security, intellectual property and the cost of running complex tasks. Cognition’s ability to convert developer interest into durable contracts will shape its negotiating power with investors and potential buyers.

SpaceX’s interest in Cognition reinforces the strategic importance of enterprise AI applications. The value in coding agents comes from their place inside high-cost, high-value workflows, where improvements in engineering speed can influence product launches, cloud spending and staffing decisions.

For Cognition, independence offers room to develop Devin across customers and platforms. A sale to SpaceX would have supplied access to capital, compute and xAI’s broader AI ecosystem, but it also would have tied the product to an unconventional corporate structure spanning rockets, satellites and artificial intelligence. The next funding round and the company’s revenue performance will reveal whether Cognition can command strategic value without a takeover.