AI Weekly: 06/22/26
SpaceX acquires Cursor for $60 billion, OpenAI burns through $3.7 billion in a single quarter ahead of a possible $1 trillion IPO, and DeepSeek closes a record $7.4B round
Good morning and welcome to this week’s edition of AI Weekly! In this week’s news, SpaceX agreed to acquire AI coding startup Cursor for $60 billion in stock just days after its historic IPO, folding the tool into its struggling, xAI-powered AI division.
In finance-related news, leaked first-quarter figures showed OpenAI burned $3.7 billion against $5.7 billion in revenue as it eyes an IPO that could value it at up to $1 trillion.
Also, China’s DeepSeek closed a record $7.4 billion first outside round structured to keep founder Liang Wenfeng firmly in control.
More on this past week’s top AI headlines below!
- ZG
Here are the most important stories of the week:
IMAGE/VIDEO
Snap is spinning off its internal generative AI video team into a separate company called Dotmo, citing the high cost of doing the work in-house, with the new venture focused on AI models that create interactive gaming experiences. Link.
Dotmo’s initial team will be made up of current Snap staff leaving to launch it; Snap won’t fund it directly, but CTO Bobby Murphy will act as lead investor with a significant personal stake while staying on as Snap’s CTO.
In exchange for a technology license and the departing talent, Snap will take a large equity stake in Dotmo, which may later seek outside funding.
The move is Snap’s second spinoff this year after it carved out its Specs smart glasses unit; Snap cut roughly 1,000 jobs (16% of its workforce) earlier in 2026, and its stock slid after the $2,200 Specs reveal.
CODING/DEVTOOLS
SpaceX agreed to acquire AI coding startup Cursor in a $60 billion all-stock deal just days after its blockbuster IPO, aiming to bolster the struggling, xAI-powered AI division it pitched as central to its public listing. Link.
The acquisition, expected to close in the third quarter, follows an unusual April pact in which SpaceX agreed to either buy Cursor for $60 billion in stock or pay a $10 billion break-up fee; it preempted a $2 billion round that would have valued Cursor at $50 billion, with backers including Andreessen Horowitz, Thrive, and Nvidia.
SpaceX told IPO investors it sees a $26 trillion addressable market for AI products, roughly the size of U.S. GDP.
The AI division, built around xAI after SpaceX merged with it earlier this year, has been restructuring following controversies including users generating non-consensual deepfakes of women and children.
RESEARCH
Nobel laureate John Jumper, who shared the 2024 chemistry prize for AlphaFold, is leaving Google DeepMind for rival Anthropic after nearly nine years, the latest defection in an intensifying talent war among the top AI labs. Link.
Jumper announced the move on X, crediting DeepMind CEO Demis Hassabis for letting him lead the AlphaFold team just six months after finishing his PhD; the two won the Nobel for the model that predicts proteins’ 3D structures from their genetic sequences.
Bloomberg reported Jumper had been a key member of Google’s team building coding tools, an area where the company has struggled to win over business customers.
His exit came the same week Character AI co-founder and Transformer co-inventor Noam Shazeer also left DeepMind, in his case for OpenAI.
World model startup Odyssey, founded by self-driving veterans Oliver Cameron and Jeff Hawke, raised a $310 million Series B at a $1.45 billion valuation led by Natural Capital, with Amazon, AMD Ventures, and GV joining. Link.
World models gather data from the physical world and simulate it with accurate physics; Odyssey built its dataset by sending people out with cameras strapped to their backs, echoing how Google Earth was assembled, and is best known for generating rich, interactive video from text prompts.
As part of Amazon’s backing, AWS becomes Odyssey’s preferred cloud provider and the startup will optimize its models for AWS’s Trainium chips, a rival to Nvidia’s.
Angel investors include Jeff Dean, Elad Gil, Garry Tan, Guillermo Rauch, and Cruise founder Kyle Vogt; Odyssey has now raised $337 million to date.
General Intuition, which trains AI agents to move through space and time using video game footage, is in talks to raise around $300 million at a roughly $2 billion valuation from backers including Jeff Bezos and Eric Schmidt. Link.
The round comes just eight months after the New York startup spun out of video-clip platform Medal with a $134 million seed; existing investors Khosla Ventures and General Catalyst are also participating.
It trains world models on Medal’s dataset of roughly 2 billion gameplay videos a year from 10 million monthly users, betting that interactive, first-person footage is the ideal base for teaching machines spatial-temporal reasoning.
Unlike rivals such as Runway, Decart, and World Labs that sell world models, General Intuition treats the agents as the product; the dataset has reportedly drawn interest from OpenAI, which previously tried to buy Medal.
POLICY/GOV’T/ETHICS
The Federal Energy Regulatory Commission unanimously ordered six major grid operators to fast-track interconnection requests from AI data centers and other large power users, while stopping short of addressing the underlying shortage of generating capacity. Link.
Data centers will foot the cost of their own interconnections; operators have 30 days to report spare capacity and 60 days to defend or revise regional electricity rates, and were told to weigh alternative transmission tech such as solid-state transformers and superconducting lines.
Data center electricity demand is projected to nearly triple through 2035, and wholesale power rates are already up as much as 267% over five years, with the largest U.S. grid operator, PJM, straining under the load.
FERC acted after Energy Secretary Chris Wright warned that grid-connection delays threatened U.S. AI competitiveness; separately, the Trump administration agreed to pay $765 million to cancel offshore wind leases, bringing its total spent scuttling offshore wind to about $2.6 billion.
The Department of Justice sided with xAI in a NAACP lawsuit seeking to halt the roughly 57 unpermitted gas turbines powering its Memphis data centers, arguing that a shutdown would threaten “national, economic, and energy security.” Link.
The DOJ memo said xAI’s Grok is one of four AI models supporting critical military operations, including recent U.S. strikes in Iran.
xAI claims its trailer-mounted, “mobile” turbines are exempt from Mississippi air pollution rules for a year; the Southern Environmental Law Center counters that federal law treats them as stationary, and therefore regulated.
The number of turbines has more than doubled since last year in an already heavily polluted region, raising PM2.5, formaldehyde, and nitrogen oxide levels; SpaceX’s IPO filing earmarks another $2.8 billion for gas turbines over three years.
Anthropic became the first pure AI company to join Frontier, the carbon removal coalition, anchoring a new $915 million tranche that nearly doubled the group’s total pledges to $1.8 billion. Link.
Frontier, founded in 2022 by Stripe, Google, and Shopify, vets and pre-purchases carbon removal so member companies can offset emissions they can’t yet eliminate; it has so far contracted nearly $700 million across more than 50 projects.
The deal is Anthropic’s first climate commitment; the company has yet to publish a sustainability report and has favored an “all of the above” energy stance that often means buying polluting power.
Frontier said future funding will carry higher scrutiny, concentrating on fewer, larger projects capable of removing a gigaton of CO2 a year, with contracts running eight to 10 years.
OTHER
OpenAI burned through $3.7 billion in the first quarter of 2026, more than half of its $5.7 billion in revenue, as both figures roughly tripled year over year ahead of a confidential IPO filing that could value the company at up to $1 trillion. Link.
The company posted a $9.3 billion operating loss and a $21.3 billion net loss (inflated by a $12.4 billion non-cash charge) on gross margins of about 39%, underscoring how frontier-model inference grows more expensive as usage climbs.
OpenAI held more than $73 billion in cash and marketable securities at quarter’s end, up from about $40 billion in December after its large March funding round.
It has guided to roughly $25 billion in cash burn this year, potentially more than doubling to about $57 billion next year, even as it carries some $665 billion in long-term compute commitments.
Chinese AI lab DeepSeek closed its first-ever outside funding round, raising more than 50 billion yuan (about $7.4 billion) at a valuation north of $50 billion through a structure built to keep founder Liang Wenfeng firmly in control. Link.
Commercial backers invested into a limited partnership run by Liang rather than the company itself, receiving no direct equity, no voting rights, and a five-year lock-up; Liang himself put in 20 billion yuan, a controlling share.
Tencent contributed roughly 10 billion yuan and battery giant CATL around 5 billion yuan, yet neither gained governance influence; only the state-linked National AI Industry Investment Fund received direct ownership and voting rights.
The raise makes DeepSeek China’s most valuable AI startup, though it remains far below U.S. peers (OpenAI recently raised at about $852 billion and Anthropic at $65 billion) given limits on Chinese capital and access to U.S. chips.
OpenAI bulked up ahead of its IPO by hiring Transformer co-inventor Noam Shazeer away from Google DeepMind and bringing on former Trump White House AI policy official Dean Ball to lead a new “Strategic Futures” team. Link.
Shazeer, who co-authored the seminal 2017 paper that introduced the Transformer and co-founded Character AI, had been a Gemini co-lead; Google re-hired him two years ago in a $2.7 billion deal for Character AI’s technology.
Ball, who helped write the White House’s AI Action Plan, will report to Chief Strategy Officer Jason Kwon and focus on catastrophic risk, recursive self-improvement, labor-market impact, and AI governance.
The hires land as OpenAI cements its insider status in Washington while rival Anthropic battles the administration, which just ordered an export ban on its Fable 5 and Mythos 5 models.
Castelion, a hypersonic missile startup founded by three SpaceX alumni, is in talks to raise a new round at a valuation of $12 billion or more, at least quadrupling its December mark as the SpaceX IPO supercharges investor appetite for defense tech. Link.
Founded in 2022 by Sean Pitt, Bryon Hargis, and Andrew Kreitz, the company builds hypersonic and long-range strike weapons and has already raised over $553 million across six rounds.
It was spurred by a 2022 U.S. Navy request for reliable hypersonic suppliers, with the founders frustrated by slow American progress relative to China and Russia.
Castelion is building a large production campus in New Mexico to scale manufacturing as it pursues Navy contracts.