Sources telling CnBC's Kate Rooney that Microsoft looked at buying AI startup cursor before SpaceX struck a deal.

And Kate Rooney joins us now with more for today's tech check. Kate.

Hey there, Mike. So Elon Musk, SpaceX was not the only company that wanted to buy AI startup cursor,

at least from what we're hearing, sources now tell me that Microsoft looked

at a potential deal to buy that AI startup.

This is according to two people familiar with those deal talks.

I am told that Microsoft chose not to proceed with that acquisition, according to at least

one of the people.

The companies did decline to comment on this guys.

But it does come as Microsoft really tries to boost its own AI tools.

And coding has been an especially competitive slice of that AI market. The startup we're talking

about cursor has been one of the leaders along with Anthropic and Open AI. Microsoft does have

its own GitHub co-pilot platform. That also has been part of a big investment, billions of dollars

into other companies. You've got Open AI and Anthropic that Microsoft has backed. It a big investment, billions of dollars into other companies.

You've got Open AI Anthropic that Microsoft has backed.

It's also those companies in turn have committed to spending on Microsoft Azure.

But the news does also signal M&A interest from big tech overall.

And then some of the cost pressures when you look up the startup side,

one of their biggest expenses is compute.

So that's chips, that's data centers to train these models and run them. Venture investors that I'm talking to say does put a lot

more pressure on some of these startups to sell themselves if they cannot raise enough money

to compete on compute. One person did also tell me the SpaceX deal with Cursor actually started

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