Hey friends 👋
Welcome back to the Signal Pro.
On the morning SpaceX went public on June 12, the Financial Times ran an opinion column under the headline “Elon Musk is a real-life Bond villain”.
An entrepreneur called Kevin Mahaffey replied to the FT’s post about their article on X. He said that he remembered that film, the one where the villain decarbonised the car industry, gave the whole planet fast internet and, in his words, “helped paralysed people interact with the world again”. His quote repost has been seen 2.9 million times and liked by 58,000 people.
Now you probably settled what you think of Elon Musk years ago, and nothing I write this week is going to move your position. So this issue is about the company instead, and I’d ask you to put him to one side and look at what SpaceX is actually building, because I think you’ll find it a lot harder to dismiss.
The lab that lost everyone
In March, xAI’s final two co-founders left within days of each other, and with them went the last of the eleven researchers Musk had recruited to start the company three years earlier.
A fortnight before that, he had complained on X that its coding tools couldn’t keep up with Claude Code or Codex, then said that xAI “was not built right first time around” and was being rebuilt from the foundations up. Executives from SpaceX and Tesla were sent in to grade the remaining staff and let go of anyone who didn’t pass muster.
Grok, meanwhile, had drawn formal investigations in several countries and lawsuits at home over sexualised images of people, including children, which is what a crowd was protesting about in Times Square the night before the IPO.
A lab whose founders had all left and whose own boss had disowned v1 is undoubtedly finished by every normal measure, and that is largely how the industry treated it.
Five months later
Last Wednesday the same division released Grok 4.6, which scores 61 on the independent Artificial Analysis Intelligence Index, level with OpenAI’s GPT-5.6 Sol and behind only Anthropic’s two newest models, Fable 5 and Opus 5. It charges $2 per million input tokens and $6 for output, significantly cheaper than Sol’s $5 and $30 and Fable’s $10 and $50.
The same week brought Grok Bot, always-on agents that learn a task by watching you do it once and then keep doing it from a cloud computer while your laptop is shut.
Two days after the model came out, GitHub had it inside Copilot, and on that same day SpaceX closed its $60 billion purchase of Cursor, the biggest acquisition of a start-up ever recorded, with Cursor’s team announcing it would join SpaceXAI (formerly xAI, now a subsidiary of SpaceX) to work on Grok.
A lab cannot lose all of its founders in March and draw level with OpenAI by August unless something other than the model was doing the heavy lifting. The rest of this issue is about what that exactly is, and about the arrangement that means SpaceXAI now gets paid whichever lab wins the race.
