In Musk's crosshairs: Descartes in talks to sell for $6 billion

Calcalist has learned that the Israeli company Descartes, which develops an AI model for real-time video generation, is in advanced talks to be sold to a major international player for approximately $6-7 billion. The original talks were with Nvidia, but a larger player entered the picture. Sources estimate that it is Elon Musk's SpaceX, although Amazon and Nebius, a cloud company with Israeli roots, are also mentioned as interested. The deal could be signed in the coming week.

Calcalist has learned that the Israeli company Descartes, which develops an AI model for real-time video generation, is in advanced talks to be sold to a major international player for approximately $6-7 billion. The deal is in advanced draft stages and could be signed as early as the coming week. The original talks were with Nvidia, but when the parties were close to an agreement, a larger international player arrived, and the founders decided to sell to it. Sources in the high-tech sector claim that it is Elon Musk's SpaceX, as there are not many options for players larger than Nvidia. However, Amazon and Nebius, a cloud company with Israeli roots, are also mentioned as interested. The entire process is taking place in the US. If the negotiations succeed, SpaceX will establish, based on the company, its first research and development center in Tel Aviv. Musk has been closely following Descartes since 2024, when it launched a game called OASIS, and after trying it, he tweeted "wow" on X. The game surpassed ChatGPT in download rates with one million users in three days. Since then, Musk and Dean Leitersdorf, one of the two founders, have been in regular contact. The main investor in Descartes is Sean Maguire, a partner at Sequoia who is close to Musk, who organized Musk's visit to Israel after October 7. Musk raised $75 billion for SpaceX just over a month ago, partly to advance AI infrastructure and the GROK model. Immediately after the offering, SpaceX acquired the AI startup Kersor for $60 billion. In early 2026, Musk merged xAI into SpaceX at a valuation of $250 billion. Descartes, founded in 2023 by Leitersdorf and Moshe Shalev, has raised about $450 million to date and employs about 100 people. Only about three months ago, it completed a $300 million raise at a valuation of about $4 billion. The company gained fame with the demo of the game OASIS, but was looking for a business direction for its technology. The main innovation is creating video at significantly lower costs. Descartes works with chip manufacturers, including Nvidia and Amazon. The founders aspired to make Descartes a technology giant, and Leitersdorf said that Israel must be one of the top five countries in AI.