Microsoft and SpaceX Bid for AI Startup Inception at Over $1 Billion Valuation

According to Reuters, citing sources, Microsoft and SpaceX are currently competing to acquire Inception, a Stanford-founded AI startup, in a deal valued at over $1 billion. Founded in mid-2024, Inception is developing a diffusion-based approach to train large language models by generating and optimizing multiple tokens simultaneously for faster performance. Microsoft had previously pursued Cursor, a GitHub Copilot competitor, in spring 2026, but withdrew due to antitrust concerns; SpaceX then closed the deal. The acquisition efforts reflect a significant loosening of the Microsoft-OpenAI alliance, with recent contract amendments allowing Microsoft to develop AGI independently and OpenAI to serve Microsoft’s direct competitors.