Tight $26.5 Trillion AI Market

Last week SpaceX estimated that its total addressable market could be as much as $28.5 trillion, according to an S-1 filing reviewed by Reuters. SpaceX expects more than 90% of that market — or $26.5 trillion — could stem from the AI sector. The vast majority of that, $22.7 trillion, could come from AI for businesses.

For context: global IT spending will rise to $6.31 trillion in 2026, according to Gartner's latest projections. Forrester's forecast is slightly lower at $5.6 trillion. So SpaceX is claiming an enterprise AI TAM that is roughly 3.5 to 4 times the entire global IT spending across all categories — hardware, software, services, data centers, devices, everything — for 2026.

That's not a market estimate. That's bigger than what enterprises spend on IT today, and it implies that AI will eventually mediate or replace spending categories far beyond traditional IT budgets — think legal services, consulting, R&D, customer service operations. 

The Everything Corporation

One thing can be said about this TAM — SpaceX is aiming to be an everything corporation. Which sounds familiar. OmniCorp from RoboCop ran the police, the military, and urban development. Tyrell Corporation from Blade Runner built the replicants. Cyberdyne Systems from Terminator built the AI that became everything. And the Trade Federation from Star Wars — a corporation so powerful it had its own droid army and a seat in the Senate. 

The FTC doesn't seem to care. Growing investments between Big Tech companies have become the norm under the Trump administration after the FTC installed Andrew Ferguson as chair. The FTC under Lina Khan launched a formal inquiry into Amazon/Google's investments in Anthropic and Microsoft's investment in OpenAI — and published a report flagging competition concerns. Then the administration changed and the inquiry went quiet. The investments got bigger.

The Cursor Deal: Pay With Your Money After You Buy Our Stock

Back to the AI market. SpaceX is strengthening its position as an AI company to IPO investors with what is essentially a "we'll pay for it with your money after you buy our stock" deal.

SpaceX announced a potential acquisition of AI coding startup Cursor for $60 billion. If SpaceX doesn't go through with it, it would pay Cursor $10 billion "for our work together." The structure is deliberate — SpaceX didn't buy Cursor outright because that would require amending its S-1 filing and potentially delaying the IPO. Once public, SpaceX can pay in stock. If SpaceX stock trades up post-IPO, paying $60 billion in inflated stock costs them less in real terms.

For now, the two companies are "working closely together to create the world's best coding and knowledge work AI," the SpaceX post said, adding that SpaceX aims to combine Cursor's product and customer base of software engineers with SpaceX's large computing resources to "build the world's most useful models."

Cursor was days away from closing a $2 billion funding round at a $50 billion valuation. That round is no longer happening.

Annualized revenue grew from $1 billion in November to $2.7 billion last month. But high computing costs have kept a lid on margins. Gross margin was negative 23% in the quarter ending in January and only recently turned positive. Even with $2 billion in fresh capital, the company would have needed to raise again — it wasn't enough to reach breakeven, let alone fund the compute needed to train its own models. For context, $2 billion buys you a fraction of what SpaceX already has sitting in its data centers in Mississippi and Tennessee.

And then there's the deeper problem: Cursor still runs on Claude and GPT models.