SpaceX strikes deal with Cursor, secures option to buy AI coding startup for $60 billion

SpaceX is working with Cursor and has an option to buy the startup for $60 billion | TechCrunch

SpaceX said it has struck a deal with Cursor to develop a next generation "coding and knowledge work AI," which includes a surprising provision -- an option to buy the popular software development platform for $60 billion later this year. Partnering with and potentially purchasing a leader in the hottest AI product category can only be seen in the context of SpaceX's much-anticipated public offering. Investors seeking more value in the IPO might see its engagement with Cursor as another way to extract value from Elon Musk's increasingly sprawling tech conglomerate. The deal won't shock those who follow the industry closely. Last week, it was reported that xAI would begin renting computing power from its data centers to Cursor, with the coding startup using tens of thousands of xAI chips to train its latest AI model. And last month, two of Cursor's most senior engineering leaders, Andrew Milich and Jason Ginsberg, left the company to join xAI, where both report directly to Musk. SpaceX described the partnership as a project combining Cursor's "product and distribution to expert software engineers" with SpaceX's Colossus supercomputer, which the company claims has the equivalent compute power of a million Nvidia H100 chips. SpaceX also said that at some undisclosed point later this year, it will either pay Cursor $10 billion for its work or acquire the company for $60 billion. Last week, TechCrunch reported that Cursor was eying a $50 billion valuation in an upcoming private fundraising round. That figure itself reflects an astonishing series of leaps. Cursor was valued at just $2.5 billion in January of last year, climbed to $9 billion by last May May, and was assigned a $29.3 billion post-money valuation when it closed on $2.3 billion in Series D funding in November. Either of those figures would represent a significant expense for SpaceX, which is widely seen to be losing money following the acquisition of xAI and the social media network X and is planning extensive capital investment. The brief statement did not say if either deal could be paid in SpaceX stock. While the move could shore up weaknesses at each company, it also reveals them. Neither Cursor nor xAI has proprietary models that can match the leading offerings from Anthropic and OpenAI -- the same companies now competing directly with Cursor for the developer market. Cursor still uses and sells access to Claude and GPT models even as both firms roll out their own coding tools, an awkward arrangement the SpaceX partnership may be designed to eventually escape.

Elon Musk's SpaceX Teams Up With Cursor for AI Coding: How Rockets and AI Fit Together

Elon Musk's SpaceX announced on Wednesday that it is partnering with coding platform Cursor to build new AI models. As part of this deal, Cursor gave SpaceX the right to acquire the company later this year for $60 billion or to pay $10 billion for their work together. Cursor said in a blog post that its work has been "bottlenecked by compute," meaning it hasn't been able to develop more advanced models due to a lack of the necessary hardware and computing power. SpaceX's Colossus supercomputer, a data center-like complex in Memphis, Tennessee, is the solution, the two companies agreed. SpaceX said the supercomputer has the equivalent of a million H100 Nvidia chips, one of the most popular GPUs for AI development. The deal highlights the growing role of agentic coding tools beyond just software companies and developers. The potential acquisition also raises the possibility that Cursor could bring agentic coding abilities to xAI's Grok, a notable hole in its current offerings compared to popular competitors like Anthropic and OpenAI. Here's what you need to know about the deal. Cursor is an AI coding platform meant to help software engineers and vibe code enthusiasts alike. Composer's coding model, Cursor, is agentic. That means it can autonomously write code and run tasks. Nvidia CEO Jensen Huang called Cursor his "favorite enterprise AI service" in an October interview. The AI industry is fickle, and the opinion of a major leader like Huang isn't just free marketing -- it controls funding, directs research, shapes public opinion and ultimately determines whether a company is successful. The new partnership with SpaceX is likely to help solidify Cursor as a household name. These kinds of AI coding tools, like Anthropic's Claude Code and OpenAI's Codex, have been very popular this year due to their ability to create things with AI, compared to a chatbot giving an answer based on existing information. They've also sparked a lot of debate and concern about the future of the software business as AI agents become increasingly capable of helping real humans. The SpaceX and Cursor partnership is most immediately about getting the resources to create more advanced AI models, with the lofty goal of creating "the world's best coding and knowledge work AI." That could certainly be used in SpaceX's rocket launches, but the scale of its business means the AI could be used in a variety of ways. SpaceX and Cursor did not immediately respond to requests for additional comment. Elon Musk has talked at length about transforming X (formerly Twitter) into his dream super app, similar to China's WeChat, which does social media, payments, messaging and more. While X is still solidly a social media app, with a heavy dose of Grok AI, he's building out an mega-congolmerate of companies under the X name. In February, SpaceX merged with xAI. That deal brought SpaceX's rocket business, Starlink satellites, the X social media platform and xAI's Grok chatbot under one parent company. Tesla isn't included. The Grok AI chatbot is probably best known now for creating nonconsensual sexual AI images, which prompted outrage and investigative inquiries at the beginning of the year. Adding Cursor to SpaceX and, theoretically, xAI's business would bolster its appeal to enterprise customers who want coding tech for work. The merger would bolster SpaceX's anticipated summer IPO, which would take the company public and allow people to buy shares of stock. Initial estimates say SpaceX could have the largest IPO ever, valued at $1.75 trillion. Musk has a financial stake or executive title in each business, so a successful merger and IPO would make the world's richest person even richer. There's no guarantee that SpaceX will acquire Cursor at the end of its deal. Bloomberg reported that the structure of the Cursor deal is partly because an outright acquisition now could further complicate the planned IPO -- already a nightmare of filings and paperwork. Musk is also a notoriously mercurial businessman, changing his mind and direction many times before deals are officially sewn up. His acquisition of Twitter was a long, drawn-out saga, where he tried to back out of his purchase before ultimately taking over and immediately changing the platform.

SpaceX cuts a deal to maybe buy Cursor for $60 billion

With an IPO looming for Elon Musk's SpaceX / xAI / X combo platter of companies, SpaceX has announced an odd arrangement to either acquire the automated programming platform Cursor for $60 billion or pay a fee of $10 billion. Buying this startup that's focused on AI coding could help xAI's tools compete with market leader Anthropic, as well as the other competitors. A report by The Information this week said Sergey Brin has directed Google's "strike team" to help its agentic AI tools catch up, while Sam Altman reportedly declared a "code red" at OpenAI last year before shutting down Sora to focus on the ChatGPT superapp and its own Codex tool.

SpaceX to Let Cursor Train Its AI on xAI Supercomputer, Teases $60B Acquisition

SpaceX has struck a deal with AI coding platform developer Cursor that will allow it to use xAI's Colossus supercomputer to "create the world's best coding and knowledge work AI." On X, SpaceX said, "the combination of Cursor's leading product and distribution to expert software engineers with SpaceX's million H100 equivalent Colossus training supercomputer will allow us to build the world's most useful models." As part of the deal, SpaceX will retain the option to purchase Cursor for $60 billion later this year. If it doesn't, it will owe Cursor $10 billion "for our work together." All of this comes weeks before SpaceX's impending IPO, which could value the company as high as $1.75 trillion. Although SpaceX has been primarily a rocket company for most of its existence, it has diversified in recent years. While development of the Starship launch vehicle continues apace, in 2026, SpaceX also supports 10 million+ Starlink customers. In February, it also absorbed Grok-developer xAI, making it the parent company of X and bringing most of SpaceX CEO Elon Musk's various ventures under a single banner ahead of the IPO. The Cursor deal is just the latest step in boosting SpaceX's value ahead of its IPO, but it also solves a number of problems facing SpaceX, xAI, and Cursor. It means Cursor can train its own AI model(s) on xAI's massive dataset, and would no longer be dependent on OpenAI and Anthropic to enhance its coding toolsets. In a Tuesday blog post, Cursor says it "released Composer less than six months ago as our first agentic coding model. After that, Composer 1.5 scaled reinforcement learning by over 20x. Composer 2 then added continued pretraining, reaching frontier-level performance at a fraction of the cost of other models. Each step up in compute has translated to meaningfully more capable models." It acknowledged, however, that Cursor has "been bottlenecked by compute," so the SpaceX deal means "our team will leverage xAI's Colossus infrastructure to dramatically scale up the intelligence of our models." This move also gives xAI its own coding tool to better compete with contemporary AI firms, and it adds even more narrative and actual value to SpaceX. Cursor's momentum can now fuel the continued expansion and growth of xAI and Grok, which has struggled to maintain relevance versus ChatGPT, Gemini, and other AI chatbots. SpaceX also locks Cursor at a set value for its potential purchase, which, at the rate Cursor's valuation has grown, is a victory in itself. Cursor was valued at just $2.5 billion in January 2025, but that jumped to $29.3 billion by year's end, The Wall Street Journal reports. Last week, it was looking at a funding round that would push its estimated value to over $50 billion. However, this also represents a strategic risk for SpaceX. Although Cursor and xAI may be able to develop a proprietary coding tool to compete with other major AI companies, doing so will take time. If it takes too long, or never quite catches up, SpaceX could be saddled with a company that peaked before it was purchased. That's on top of the debt it acquired with the mergers with xAI and its subsidiary, Twitter/X. Fortunately for Musk and his fellow SpaceX shareholders, the IPO will probably come before the gamble needs to show its returns. But with Musk claiming xAI needs to be rebuilt from the ground up, how it is rebuilt may go a long way to deciding it and Cursor's long-term future.

Andreessen, Thrive Poised for Windfall From SpaceX's Cursor Bid

Andreessen Horowitz and Thrive Capital are poised for a multibillion-dollar windfall from their early investments in Cursor if Elon Musk's SpaceX moves forward with an agreement to acquire the artificial intelligence coding startup for $60 billion. Andreessen Horowitz is the largest outside shareholder in the startup, with a roughly 10% stake that would be worth about $6 billion at the estimated transaction price, according people familiar with the matter. The venture firm backed Cursor multiple times, including leading the startup's Series A funding round at a $400 million valuation and co-leading a follow-up financing at a $2.5 billion valuation. Thrive is the second largest outside shareholder, with a roughly 7% stake in the company, said one of the people, who spoke on condition of anonymity as the information is not public. That stake would be worth about $4.2 billion, adding to its potential gains from SpaceX as an early investor in the rocket maker. Andreessen, Thrive and Cursor declined to comment. SpaceX said Tuesday that it has an agreement giving it the right to buy Cursor for $60 billion later this year or to pay $10 billion for the companies' work together, part of the firm's efforts to catch up with rivals in AI coding tools. SpaceX isn't acquiring Cursor immediately because of the rocket company's imminent initial public offering, Bloomberg News has reported. Cursor, which launched an AI assistant in 2023, emerged as one of the fastest-growing startups of all time and a central player in tech's "vibe coding era." The deal, if completed, would offer a significant return for Cursor's backers at a time when many startups are waiting longer to go public, depriving venture firms of more liquidity. "This is a literal rocket ship being bought by an actual, literal rocket ship," said Michael Fertik, a very early investor in Cursor when the company still went by the name Anysphere. "Together, they're going to have the possibility of seeking the brass ring of ruling the Earth on software," said Fertik, who invests in early-stage startups. Cursor's valuation had soared over the past two years, jumping from $9.9 billion last June to $29.3 billion in November. Cursor had been in talks with investors, including Andreessen and Thrive, to raise about $2 billion in a funding round with a valuation of more than $50 billion, not including the investment, Bloomberg reported last week. Those deal talks have been stopped as a result of xAI's new deal. Other investors stand to benefit from Cursor's deal with SpaceX. Accel owns roughly 2.5% of the company, worth about $1.5 billion, the person said. Benchmark owns less than 1% of the startup, or about a $300 million stake, the people said. Despite it being a relatively minor investment for Benchmark, the deal could return a significant portion of Benchmark's funds, which usually hover around $400 million. Accel and Benchmark declined to comment. No firms stands to gain as much from the potential Cursor deal as Andreessen and Thrive, both in terms of the returns and the reputational benefit. When the firms invested, many startups were competing to dethrone AI code-generation pioneer GitHub Copilot. Andreessen's team, in particular, was using Cursor for hobbyist coding projects. As part of their investments, Andreessen general partner Martin Casado and Thrive general partner Miles Grimshaw joined Cursor's board of directors. Miles Clements, an Accel partner who helps lead the firm's growth fund, is also on the board. In a previous interview about Andreessen's AI infrastructure investments, Casado told Bloomberg News the goal is to be early. "We invest much before these crazy numbers typically," Casado said. "Even when you see these big headline numbers or whatever, often we're in earlier."

SpaceX secures option to acquire AI coding startup Cursor for $60B

SpaceX added that the deal would pair Cursor's product with its Colossus AI training infrastructure. "The combination of Cursor's leading product and distribution to expert software engineers with SpaceX's million H100 equivalent Colossus training supercomputer will allow us to build the world's most useful models," the post said. "Cursor has also given SpaceX the right to acquire Cursor later this year for $60 billion or pay $10 billion for our work together." Deepika Giri, AVP and head of AI research at IDC Asia/Pacific, said the contractual exposure is the immediate concern for enterprise buyers. "Cursor's existing zero-data-retention agreements with model providers like OpenAI and Anthropic could be challenged under the new SpaceX ownership, which might quite likely renegotiate or terminate subprocessor relationships," Giri said. "It is likely that Cursor will cease to maintain model neutrality, which will work in favor of xAI."

SpaceX strikes $60bn deal to acquire AI start-up Cursor

Elon Musk's SpaceX has struck a deal to acquire code-editing start-up Cursor for $60bn in a bid to catch up on rivals such as OpenAI and Anthropic. SpaceX has an option to acquire Anysphere, Cursor's parent company, for $60bn this year. If SpaceX decides not to proceed, it would pay the company $10bn, the rocketmaker announced on Tuesday. That would in effect be among the largest termination fees in history. The agreement comes as Musk tries to reel in AI rivals whose models have so far outstripped those produced by his xAI lab. The billionaire founded xAI in 2023 to take on OpenAI and Anthropic, and has since merged the group with SpaceX, which is gearing up for a record-breaking IPO this summer. SpaceX said it was looking to tap Cursor's "leading product and distribution to expert software engineers". Cursor, meanwhile, is seeking access to SpaceX's massive computing resource to develop its own coding tools. "We're very excited about working with them and we think SpaceX is basically the best company in the world when it comes to building out compute. The feats they have been able to pull off are extraordinary," said Oskar Schulz, Anysphere's president.

Spacex says it has option to acquire startup Cursor for $60 billion

April 21 (Reuters) - Elon Musk's SpaceX announced on Tuesday it has been granted the option to either acquire code-generation startup Cursor for $60 billion later this year, or pay $10 billion for a partnership. SpaceX and Cursor are ⁠working closely together to create coding and knowledge work AI, the space company said in a post on X. Cursor did not immediately respond to a Reuters request for comment. Two product engineering heads at Cursor, a startup ⁠that sells AI models for coding tasks, said in March they joined SpaceX to contribute to the company's lunar projects ⁠and xAI, Musk's AI startup that is now a part of SpaceX. Musk welcomed ⁠the engineers, Andrew Milich and Jason Ginsberg, saying, "Orbital space centers and ⁠mass drivers on the Moon will be incredible." Reporting by Juby Babu in Mexico City; Editing by Vijay Kishore Our Standards: The Thomson Reuters Trust Principles., opens new tab

Microsoft looked at buying Cursor before SpaceX deal, sources say

Prior to SpaceX's announcement this week that it's obtained the right to acquire Cursor for $60 billion, Microsoft looked at a potential deal for the AI coding startup, according to two people familiar with the matter. Microsoft, which is trying to boost the popularity of its artificial intelligence tools to keep pace in the booming market for AI tools, chose not to proceed with a bid, said one of the people. Both sources asked not to be named because the discussions were private. While Microsoft has gained traction among developers with GitHub Copilot, the AI coding market is currently being dominated by Cursor, along with Anthropic and OpenAI. Microsoft's primary role in the space has been as an investor and cloud provider, pumping billions of dollars into Anthropic and OpenAI, which have committed to hefty spending on Microsoft Azure. Microsoft declined to comment. A Cursor spokesperson didn't respond to a request for comment. Venture capital firms had lined up financing for Cursor at a $50 billion valuation, CNBC reported earlier this month, underscoring the soaring demand for tools that can help users quickly assemble websites and applications. SpaceX, controlled by Elon Musk, said in a post on X on Tuesday that it agreed to a deal to buy Cursor for $60 billion by the end of the year, or it will pay the company $10 billion. "SpaceXAI and @cursor_ai are now working closely together to create the world's best coding and knowledge work AI," the company said in the post. Cursor CEO Michael Truell said on X that he's "excited to partner with the SpaceX team to scale up Composer," referring to his company's AI model. The SpaceX agreement came together so late in Cursor's fundraising process that prospective investors were caught off guard by the deal, one of the sources said. SpaceX had offered Cursor access to compute in the weeks leading up to this announcement. Musk merged SpaceX with his AI startup xAI in February in a deal valued at $1.25 trillion, and is in the process of taking the combined company public in what's likely to be a record IPO. Microsoft, meanwhile, has seen its stock price drop 10% this year, underperforming the broader market and its hyperscaler peers. CEO Satya Nadella told analysts in January that GitHub Copilot had 4.7 million paying subscribers, up 75% from a year earlier. OpenAI is pushing its own Codex programming app. CEO Sam Altman said on X on Tuesday that Codex has reached 4 million active users, less than two weeks after crossing the 3 million mark. Anthropic's Claude Code service has gained popularity this year, helping Anthropic to reach $30 billion in annualized revenue this month.

SpaceX says it can buy AI coding tool Cursor for $60B later this year

SAN FRANCISCO (AP) -- SpaceX says it has the rights to buy artificial intelligence coding tool Cursor for $60 billion later this year as Elon Musk's space exploration and AI company looks for ways to compete with rivals Anthropic and OpenAI ahead of a planned Wall Street debut. SpaceX said that, alternatively, it could pay $10 billion to "work together" with Cursor. SpaceX announced the deal Tuesday on the social platform X, which along with the AI chatbot Grok is part of a constellation of properties that Musk has merged into his rocket company. Cursor, made by San Francisco startup Anysphere, is a popular AI coding assistant. What SpaceX describes as Cursor's wide "distribution to expert software engineers" is likely part of what makes it attractive to Musk's company, giving it access to a new customer base. Cursor said its new partnership with SpaceX subsidiary xAI will enable it to build future AI products using xAI's massive AI data center complex Colossus, based in Memphis, Tennessee. "We've wanted to push our training efforts much further, but we've been bottlenecked by compute," Cursor said in a statement on X, which didn't mention the possibility of being acquired. "With this partnership, our team will leverage xAI's Colossus infrastructure to dramatically scale up the intelligence of our models." Cursor, which started in 2022, helped sparked a trend called "vibe coding" as AI coding assistants have become increasingly capable of doing the work of computer programming. Cursor competes with other coding tools like Anthropic's Claude Code and OpenAI's Codex but also has relied heavily on partnerships with those larger AI research companies for the foundations of its technology. It was Cursor's Composer, combined with Anthropic's Claude Sonnet, that a prominent AI researcher was playing with for weekend projects when he coined the phrase "vibe coding" in early 2025.

SpaceX and Cursor strike partnership that might end in a $60 billion acquisition

SpaceX and AI company Cursor have struck a new partnership that could see the owner of X buy the AI company for $60 billion later this year. "SpaceXAI and @cursor_ai are now working closely together to create the world's best coding and knowledge work AI," SpaceX wrote in a post on X. According to SpaceX, the deal allows for it to either invest $10 billion into the company known for its AI coding tool, or acquire it entirely "later this year" for $60 billion. If an acquisition were to happen, it's not clear at what point Cursor could officially join the fold of Elon Musk's rapidly expanding and increasingly enmeshed web of companies. SpaceX bought xAI, the billionaire's AI company that also controls X, earlier this year. SpaceX is currently getting ready to go public this summer in what will likely be the biggest initial public offering (IPO) in history. Cursor, which has reportedly been in talks to raise its own $2 billion round of funding, is known for its AI coding tool of the same name that's become the vibe coding platform of choice for many developers. It allows people to use either its own models or those from other leading AI companies, including OpenAI, Google, Anthropic and xAI. In a statement, Cursor said its partnership with SpaceX will "accelerate our model training efforts" while addressing infrastructure-related issues that have slowed it down in the past. "We've wanted to push our training efforts much further, but we've been bottlenecked by compute," the company said. "With this partnership, our team will leverage xAI's Colossus infrastructure to dramatically scale up the intelligence of our models for coding and beyond."

SpaceX Said to Agree to Buy Cursor for More Than $50 Billion

Erin Griffith and Mike Isaac reported from San Francisco, and Ryan Mac from Los Angeles. SpaceX, Elon Musk's rocket and satellite company, has agreed to buy Cursor, a fast-growing artificial intelligence start-up that makes code-writing software, for more than $50 billion, two people familiar with the situation said. SpaceX is making the deal just as it prepares to go public in what is likely to be one of the largest initial public offerings ever. In February, SpaceX acquired xAI, Mr. Musk's A.I. start-up, in a transaction that valued the combined company at $1.25 trillion, according to information sent to investors. Mr. Musk is trying to direct his rocket and satellite manufacturer to focus on A.I. and orbital data centers. Cursor, which has raised more than $3 billion in funding, was founded in 2022 and made waves as one of the fastest-growing A.I. start-ups. It was under pressure in recent months after OpenAI and Anthropic announced competing code-writing products that were embraced by tech companies. The company had been in talks to raise funding in recent weeks. This is a developing story. Check back for updates.

SpaceX Says It Has Agreement to Acquire Cursor for $60 Billion

SpaceX said it has an agreement to either acquire AI coding startup Cursor for $60 billion later this year or pay $10 billion for its work together, as it works to catch up to rivals in AI coding. SpaceX announced the deal in a post on X, saying the companies are "now working closely together to create the world's best coding and knowledge work AI." SpaceX, which is planning an initial public offering later this year, recently merged with xAI, Elon Musk's artificial intelligence company. The deal comes shortly after Musk said that xAI is behind on coding tools compared with its peers and vowed to rebuild the company from the ground up. In March, he ordered a round of layoffs. He's also been seeking engineering talent, and has previously hired from Cursor. Cursor had been in talks with investors to raise about $2 billion in a funding round with a valuation of more than $50 billion, not including the investment. Bloomberg reported. Both Nvidia and Andreessen Horowitz were set to participate in the deal. Cursor's AI assistant, launched in 2023, helps programmers write and debug code more efficiently. It's become one of the fastest-growing startups of all time and a central player in tech's "vibe coding" era, as demand surges among software developers for artificial intelligence coding tools. The SpaceX team "has an enormous amount of compute and we think together we can scale up our model efforts and we're really excited about it," Cursor president Oskar Schulz said. "We really like their team." Competition among AI coding startups is heating up as Anthropic, OpenAI and a long list of startups push out products to streamline software development.

SpaceX secures option to buy AI coding startup Cursor for $60B

SpaceX announced the deal on X, pre-empting a New York Times report that framed it as a completed acquisition. The structure gives SpaceX optionality: exercise the call by year end or walk away having paid $10B for shared compute access and joint model work. Cursor CEO Michael Truell called it a partnership to 'scale up Composer'. SpaceX has secured a call option to acquire AI coding startup Cursor, developed by San Francisco-based Anysphere, for $60 billion later this year, or, alternatively, to pay $10 billion for the joint AI development work the two companies are conducting together. SpaceX announced the arrangement in a post on X on Tuesday, describing "SpaceXAI" and Cursor as working together to "create the world's best coding and knowledge work AI." The post came just before the New York Times published a story citing two people who said SpaceX had agreed to purchase Cursor for $50 billion. The Times subsequently updated its story to reflect SpaceX's own framing of the deal as an option, not a completed acquisition. Cursor CEO Michael Truell confirmed the arrangement in a post on X, writing that he was "excited to partner with the SpaceX team to scale up Composer", a reference to Cursor's proprietary AI model. The option period runs through the end of 2026. Whether SpaceX exercises the $60 billion option will depend in part on how the joint model development progresses over the intervening months. No employee transfer or integration details have been disclosed. The commercial logic on both sides is clear. Cursor, a fork of Visual Studio Code with deep AI integration, developed by Anysphere, a company founded in 2022 by four MIT students: Michael Truell, Sualeh Asif, Arvid Lunnemark, and Aman Sanger, has grown at a pace that has become a benchmark for AI-era startups. It was valued at $400 million in a Series A in mid-2024, climbed to $2.5 billion by January 2025, raised $900 million at $9.9 billion in June 2025, and closed a $2.3 billion Series D in November 2025 at $29.3 billion. By February 2026 it had crossed $2 billion in annualised recurring revenue, making it the fastest B2B company to scale from zero to $2 billion in roughly three years, by widely cited metrics. More than half of the Fortune 500 now use Cursor. Co-founder and CTO Arvid Lunnemark departed in October 2025 to found Integrous Research, an AI safety lab; the three remaining founders continue to lead the company. For SpaceX, which absorbed Elon Musk's AI venture xAI in an all-stock transaction in February 2026 valuing the combined entity at $1.25 trillion, the deal addresses a visible gap. While OpenAI's Codex has reached three million weekly users and Anthropic's Claude Code has become the most-used AI coding tool among professional engineers, xAI has no comparable product. The Colossus supercomputer in Memphis, targeting one million H100-equivalent GPUs, gives SpaceX training infrastructure at scale, but without a leading application to route it through. The Cursor partnership provides that application. SpaceX had already hired two Cursor engineers, Andrew Milich and Jason Ginsberg, following an exodus of xAI co-founders. And last week, xAI began renting compute capacity to Cursor, allowing the startup to use tens of thousands of xAI chips to train its latest model, suggesting the commercial relationship predates Tuesday's announcement. The IPO context matters. SpaceX is preparing for a planned Nasdaq listing in June 2026, targeting a $1.75 trillion valuation and a raise of up to $75 billion. A $60 billion option over the world's fastest-growing AI developer tool adds narrative and commercial value to that prospectus regardless of whether the option is ultimately exercised. For Cursor, the deal provides financial certainty, either $10 billion in near-term cash for the collaboration or a $60 billion exit, without requiring an immediate sale. This is particularly notable because Cursor was simultaneously in talks as of the weekend to raise $2 billion at a valuation above $50 billion in a separate fundraising round, with Andreessen Horowitz expected to co-lead and Nvidia and Thrive Capital also participating. Whether that round proceeds alongside or instead of the SpaceX arrangement is unclear. The deal also sharpens the competitive map in AI coding tools. Cursor had previously turned down acquisition overtures from OpenAI. OpenAI's own response is to press ahead with Codex, now at three million weekly users with 40% of revenue from enterprise, and with its planned acquisition of Windsurf. Anthropic's Claude Code is the third significant player. SpaceX is now formally entering this market through Cursor's existing distribution rather than building from scratch, a faster path to relevance, at an extraordinary price.

SpaceX Obtains Option to Buy Cursor for $60 Billion

In an X post on Tuesday, SpaceX referred to a clumsily named entity called “SpaceXAIâ€â€"a term Musk has used beforeâ€"but that’s not even the big news. The big news is that SpaceX, assuming that’s still what the rocket company that also owns xAI and X the social media app wants to be called, now has the option to buy the AI company Cursor for a rather breathtaking $60 billion. Apparently SpaceX has tapped cursor to help it build AI for “coding and knowledge workâ€â€"in other words AI designed to code and do computer-based drudgery. This follows OpenAI’s pivot to enterprise last month, which in turn came after the rise of frenetic AI productivity mania brought on by the release of OpenClaw, which in turn was helped along by Anthropic’s Claude Code, which launched in 2025. But before there was Claude Code there was Cursor, one of the original vibe coding apps, which launched in 2023. Last year, when Cursor’s parent, Anysphere, raised a $105 million funding round, it was valued at $2.5 billion. By my math, SpaceX apparently thinks the Cursor product alone may be worth 24 times that amount. The joint project earns Cursor either $10 billion, or if SpaceX is feeling acquisitive, it could just be bought for the full $60 billion at some point “later this year.†60 is a lot of billions of dollars. For reference, while the SpaceX IPO has a targeted listing valuation of $1.75 trillion, SpaceX hopes to raise $75 billion from investors. In a sense, SpaceX would be spending 80 percent of that before the IPO is even done if it opts to buy Cursor.

SpaceX says it can buy Cursor later this year for $60 billion or pay $10 billion for 'our work together'

A SpaceX Falcon 9 rocket is displayed outside a Space Exploration Technologies Corp. facility in Hawthorne, California, on March 26, 2026. SpaceX said on Tuesday that the company has struck a deal with artificial intelligence startup Cursor and has the rights to acquire it for $60 billion later this year, or to pay $10 billion for work they are doing together. "SpaceXAI and @cursor_ai are now working closely together to create the world's best coding and knowledge work AI," the company said in a post on X. Elon Musk, SpaceX's founder and CEO, merged the reusable rocket company with his AI startup xAI in February in a deal he valued at $1.25 trillion. He's now poised to take the combined company public in what will likely be a record IPO.

SpaceX lands deal to likely purchase Claude Code and OpenAI Codex competitor - 9to5Mac

When SpaceX isn't landing rockets, it's apparently landing AI company deals. Two months ago, the firm behind Starlink absorbed xAI, which includes Twitter-turned-X. Now SpaceX is eyeing a competitor to Claude Code and OpenAI's Codex. Cursor has been popular with software engineers who code with AI on the Mac. It was one of the first services to connect large language model artificial intelligence to the process of building apps. Now SpaceX and Cursor are "working closely together to create the world's best coding and knowledge work AI," the two companies say. The collaboration includes a $10 billion payment from SpaceX to Cursor, or if the stars align for Cursor, a $60 billion acquisition. Cursor shared more details about the arrangement: Cursor is partnering with SpaceX to accelerate our model training efforts. We released Composer less than six months ago as our first agentic coding model. After that, Composer 1.5 scaled reinforcement learning by over 20x. Composer 2 then added continued pretraining, reaching frontier-level performance at a fraction of the cost of other models. Each step up in compute has translated to meaningfully more capable models. We've wanted to push our training efforts much further, but we've been bottlenecked by compute. With this partnership, our team will leverage xAI's Colossus infrastructure to dramatically scale up the intelligence of our models Whether it's a temporary team-up or the start of an acquisition, the SpaceX-Cursor arrangement strengthens a competitor to Anthropic's Claude Code and OpenAI's Codex agentic coding software. As for Apple, we'll see what new AI resources the company has ready for developers at WWDC 2026 in a little over a month. Apple already supports agentic coding in Xcode.

Elon struck before Cursor competitors

Why it matters: Holding off from selling appears to have paid off for Cursor. Driving the news: Elon Musk had been eyeing Cursor since at least last year, when the company's valuation had surged to $29.3 billion by November from $9.9 billion early in the year. * Microsoft also eyed the company, according to CNBC, but ultimately did not make an offer. The big picture: Though considered a killer app for AI usage, coding has become increasingly difficult and expensive for standalone companies. * Cursor has been working on its own model to try and stave off some of the competition -- which is expensive and requires large amounts of compute. * The difficulty in obtaining compute makes combining with a hyperscaler very attractive. What we're watching: Musk has showed up in more than one M&A rumor in recent weeks.

SpaceX secures option to buy AI startup Cursor for $60bn or partner for $10bn

Cursor is aSilicon Valley startup using AI to automate coding as Elon Musk's firm seeks foothold in the AI market SpaceX said it has secured an option to either acquire code-generation startup Cursor for $60bn later this year, or pay $10bn for their new partnership, as it pushes deeper into the lucrative market for AI developer tools. Along with OpenAI and Anthropic, Cursor is one of several Silicon Valley startups that has drawn waves of developers by using artificial intelligence to automate coding, a business where AI companies have found early commercial traction. The deal could give xAI, the Grok chatbot maker that SpaceX merged with in February, a stronger foothold in the AI coding market where it has so far lagged rivals. It also provides Cursor with more computing capacity to develop AI models. "The combination of Cursor's leading product and distribution to expert software engineers with SpaceX's million H100 equivalent Colossus training supercomputer will allow us to build the world's most useful models," SpaceX said in a social media post on Tuesday. Colossus is xAI's supercomputer cluster in Memphis, which it has touted as the largest in the world. The company has been spending billions of dollars on AI infrastructure. The announcement comes ahead of SpaceX's highly anticipated public debut in the coming months, with the company eyeing a valuation of close to $1.75tn and a $75bn fundraise that could go down as the biggest IPO in history. Two product engineering heads at Cursor, a startup that sells AI models for coding tasks, said in March they joined SpaceX to contribute to the company's lunar projects and xAI, Musk's AI startup that is now part of SpaceX. Musk welcomed the engineers, Andrew Milich and Jason Ginsberg, saying, "Orbital space centers and mass drivers on the Moon will be incredible."

Cursor's 25-year-old CEO is a former Google intern who just inked a $60 billion deal with SpaceX | Fortune

Cursor's 25-year-old CEO Michael Truell helped take the AI coding company from a college passion project to a potential $60 billion acquisition by Elon Musk's SpaceX. On Tuesday, SpaceX announced in a post on X that Cursor gave SpaceX the right to acquire the company later this year for $60 billion. If SpaceX doesn't buy Cursor, it will pay $10 billion for their work together, the company said. Either way, it's a big win for Truell, who just a few years after dropping out of MIT is worth an estimated $1.3 billion, according to Forbes. His and Cursor's rapid rise is among Silicon Valley's biggest success stories. Truell grew up in New York City and attended the Horace Mann School, a private prep school in the Bronx. He'd always had an interest in technology, and started coding at age 11 to make his own mobile games, he told Fortune's Allie Garfinkle. By age 18, Truell had just wrapped up his first year at MIT and was completing a summer internship at Google. During this time, he worked on "language models for feed ranking," according to his profile on LinkedIn. Truell met Ali Partovi, an early investor in Facebook and Airbnb, during his internship, as Partovi was recruiting for his Neo Scholars program, an accelerator for young tech talent. Truell immediately impressed him by completing a written coding test "in record time," Forbes reported. After he left that meeting, Partovi put a star with a circle next to his name on a list of potential Neo Scholar candidates, meaning "he was so impressed that he'd invest in any project Truell pursued," according to Forbes. Truell later became a Neo Scholar, one of only 30 selected each year. When he started Cursor, Partovi became one of the company's first investors. Truell and his MIT classmates Aman Sanger, Sualeh Asif, and Arvid Lunnemark were interested in AI before OpenAI changed the industry by launching ChatGPT in 2022. A year before that, the Cursor cofounders were thinking about what they should do in AI, Truell said in an interview at Y Combinator's AI Startup School in San Francisco last June. "In 2021 we were trying to figure out what we do with that interest," he said. "Do we go and work on AI in academia? Or, you know, do we go join, you know, a big existing AI effort? Or do we start our own thing?" By 2022, they had their answer. Truell and his cofounders were obsessed with Microsoft's GitHub Copilot, which launched for individual developers in 2022. But the program had its limits, they found, and could be improved. At first, the cofounders focused on what Truell described as a "copilot for mechanical engineers" partly because he said it would be a niche space that was "sleepy and uncompetitive," he said during the interview with Y Combinator. Two of Truell's cofounders were also working on a message encryption project at the same time. It wasn't until about six months later the team pivoted into AI coding, which Truell said at first they had avoided "because we thought it was too competitive." But the team was desperate after their first couple of ideas failed to get off the ground, he said. Plus, "we realized we were really inherently excited about the future of coding," he said during the Y Combinator interview. That passion propelled Truell and his cofounders to one of the fastest upward trajectories in the history of Silicon Valley startups. The company's valuation has skyrocketed almost as fast as AI's capabilities have improved. Cursor raised an initial $60 million funding round in June 2024. By the end of 2025, it had raised three more funding rounds that brought in $3.3 billion, skyrocketing its valuation from $2.5 billion to $30 billion in a single year. The company has grown even faster than some big tech names with similar rapid rises. Slack took two-and-a-half years to reach $100 million in annualized revenue, while Dropbox took four years to cross the same mark. Cursor hit the $100 million annualized revenue milestone in January 2025, around one year and eight months after it launched its first product in early 2023. Its annualized revenue crossed $2 billion in February, according to Fortune. Cursor is a coding assistant with its own Integrated Development Environment, or IDE, where the company's AI is built-in. At its most basic level, Cursor's AI capabilities let users code more quickly by constantly working to predict the code a user is likely to write next. With the launch of Cursor 3 earlier this month, the company has improved on its agentic coding, in which AI can write code on its own with broad user guidance -- a move to compete with Anthropic's Claude Code, which launched just over a year ago but already has gained popularity with programmers. Cursor has more than 300 employees, and 67% of Fortune 500 companies use the company's technology, Fortune reported. Some well-known companies that use Cursor include Salesforce, Samsung, and Budweiser, according to the company's website. Before the SpaceX announcement Tuesday, the company was in talks to raise another round at a $50 billion valuation TechCrunch reported. Now, it may be acquired for $10 billion more than that. For context, the company was in talks to raise funding at nearly a $10 billion valuation a year ago, according to Bloomberg. Ultimately, what may have made Cursor a success where the founders' other projects failed was a simple decision: to go all in. "We had a ton of conviction about that and we had a ton of excitement about that and so at some point we just decided to go for it," Truell said.

SpaceX says it can buy AI coding tool Cursor for $60B later this year

SAN FRANCISCO -- SpaceX says it has the rights to buy artificial intelligence coding tool Cursor for $60 billion later this year as Elon Musk's space exploration and AI company looks for ways to compete with rivals Anthropic and OpenAI ahead of a planned Wall Street debut. SpaceX said that, alternatively, it could pay $10 billion to "work together" with Cursor. SpaceX announced the deal Tuesday on the social platform X, which along with the AI chatbot Grok is part of a constellation of properties that Musk has merged into his rocket company. Cursor, made by San Francisco startup Anysphere, is a popular AI coding assistant. What SpaceX describes as Cursor's wide "distribution to expert software engineers" is likely part of what makes it attractive to Musk's company, giving it access to a new customer base. Cursor said its new partnership with SpaceX subsidiary xAI will enable it to build future AI products using xAI's massive AI data center complex Colossus, based in Memphis, Tennessee. "We've wanted to push our training efforts much further, but we've been bottlenecked by compute," Cursor said in a statement on X, which didn't mention the possibility of being acquired. "With this partnership, our team will leverage xAI's Colossus infrastructure to dramatically scale up the intelligence of our models." Cursor, which started in 2022, helped sparked a trend called "vibe coding" as AI coding assistants have become increasingly capable of doing the work of computer programming. Cursor competes with other coding tools like Anthropic's Claude Code and OpenAI's Codex but also has relied heavily on partnerships with those larger AI research companies for the foundations of its technology. It was Cursor's Composer, combined with Anthropic's Claude Sonnet, that a prominent AI researcher was playing with for weekend projects when he coined the phrase "vibe coding" in early 2025.

SpaceX partners with AI startup Cursor, may buy it for $60 bn

San Francisco (United States) (AFP) - SpaceX on Tuesday announced a partnership with AI coding company Cursor and said the alliance comes with an option to buy the startup for $60 billion later this year. The move by Elon Musk's rocket and satellite company comes as it prepares to become publicly traded, and shortly after it took over the billionaire's artificial intelligence outfit xAI. Cursor, founded in 2022 and based in San Francisco, specializes in AI for creating software code, particularly for business uses. "SpaceXAI and @cursor_ai are now working closely together to create the world's best coding and knowledge work AI," the company said in a post on X. Combining Cursor's software and product expertise with SpaceX's "Colossus" AI training supercomputer will enable the company "to build the world's most useful models," it said. The partnership comes as AI sector rivals vie to be the preferred option for software developers. Cursor competes with Microsoft's social coding platform GitHub, which has been a leading resource in the developer community. OpenAI announced on Tuesday that its coding tool, Codex, has grown to four million weekly users, up from three million just weeks ago. Meanwhile, Anthropic has put out word that revenue from its Claude Code tool for developers has surged. AI in the sky Musk announced in February that SpaceX would acquire xAI, a step in his plan to launch solar-powered, satellite-based data centers to run future AI models. SpaceX has set the pace in the space launch market, offering reusable rockets that vastly reduce the cost of putting satellites into orbit and itself owning the largest satellite constellation, Starlink. The company is set for a stock market listing this year widely expected to be the biggest in history, with media reports pointing to an initial public offering (IPO) as early as June. Musk called SpaceX's absorption of xAI "not just the next chapter, but the next book" for the companies. "Global electricity demand for AI simply cannot be met with terrestrial solutions... The only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space," Musk wrote when his companies were merged. The project fits into Musk's long-term ambition to build colonies on the Moon and Mars and is "a first step towards becoming a Kardashev II-level civilization," he wrote. Coined in the 1960s by a Soviet astronomer, the futurist term refers to a civilization able to use all of the energy from its home system's star. SpaceX filed papers early this year with US regulators that set the stage for what could be the largest-ever public stock offering, a source familiar with the matter told AFP. The confidential filing puts the rocket and satellite builder on track to list its shares on a public exchange by July, according to The Wall Street Journal, citing unidentified sources. Media reports have said the initial public offering could be valued at a whopping $75 billion or more, for a venture with stratospheric ambitions. If successful, SpaceX could arrive on Wall Street with a valuation exceeding $1.75 trillion, putting it among the world's ten biggest companies by market capitalization. Besides SpaceX, two other tech heavyweights, the AI developers OpenAI and Anthropic, are reportedly planning IPOs this year.

SpaceX partners with Cursor on AI training, floats potential $60B acquisition - SiliconANGLE

SpaceX partners with Cursor on AI training, floats potential $60B acquisition SpaceX Corp. will help Cursor, a venture-backed vibe coding startup, train artificial intelligence models optimized for programming tasks. The companies announced the initiative on Thursday. According to SpaceX, the partnership agreement gives it the option to buy Cursor for $60 billion by year's end. If the space launch provider opts against an acquisition, it will pay $10 billion for the collaboration. Cursor, officially Anysphere Inc., develops one of the industry's most popular vibe coding platforms. CNBC reported on Sunday that the company was in talks to raise $2 billion from investors at a valuation exceeding $50 billion. According to Bloomberg, Cursor has since scrapped the round on account of the deal with SpaceX. SpaceX will give Cursor access to the graphics processing units operated by its xAI unit. According to the aerospace company, its GPU capacity equals the combined processing power of 1 million H100 chips. The H100 was Nvidia's flagship AI accelerator for data centers until 2024. The most capable version of the chip, the liquid-cooled H100 SXM, can perform 35 trillion operations per second when processing FP64 data. SpaceX's xAI unit also uses other, more advanced Nvidia chips in its data centers. Last week, Business Insider reported that SpaceX plans to give Cursor access to tens of thousands of GPUs. The latter company will reportedly use them to train a coding model called Composer 2.5. The algorithm is the planned successor to Composer 2, an internally-developed AI that Cursor debuted last month. It powers some of the features in the company's namesake vibe coding platform. The platform uses Composer 2 and third-party models to automate tasks such as rewriting legacy code in a new language. AI models generate a significant amount of temporary data when processing a prompt. In some cases, that temporary data's memory footprint exceeds the capacity of the algorithm that generated it. Composer 2 addresses the challenge with a feature that Cursor calls self-summarization. When the temporary datasets produced by the model start approaching capacity limits, it condenses them into a summary that takes up less space. The Cursor-SpaceX partnership may affect xAI's development roadmap. Last year, xAI released a model called grok-code-fast-1 that is built to power AI code editors, the same use case for which Composer 2 is optimized. It's possible that the SpaceX unit will redirect resources from grok-code-fast-1 to other projects. In a post on X, SpaceX stated that the partnership is intended to "create the world's best coding and knowledge work AI." That suggests the models produced through the collaboration will focus on not only coding tasks but also other enterprise use cases. It's unclear how SpaceX hopes to realize a return on the up to $60 billion that it intends to spend on the initiative. One possibility is that xAI plans to integrate Cursor-developed into paid products. The company sells access to Grok, its internally-developed line of large language models, through an application programming interface. The vibe coding market is a large and growing source of revenue for AI model developers such as Anthropic PBC. The Cursor partnership gives SpaceX a bigger presence in that segment, which may help drive up investor interest in its upcoming public offering. SpaceX reportedly hopes to sell $75 billion worth of shares at a $1.75 billion valuation.

SpaceX doubles down on AI with its potential $60 billion Cursor buy

SpaceX still has deep roots in the rocket business, but the Elon Musk-owned company is doubling down on artificial intelligence as it prepares for an IPO. In a social media post Monday afternoon, SpaceX announced it had started a working relationship with AI coding startup Cursor, which includes an option to buy the company for $60 billion. (Should SpaceX decide against buying Cursor, it will pay $10 billion for its work.) "The combination of Cursor's leading product and distribution to expert software engineers with SpaceX's million H100 equivalent Colossus training supercomputer will allow us to build the world's most useful models," the company said in the post. The announcement comes just over two months after SpaceX acquired Musk's xAI, which runs the Grok chatbot. It also comes as the rocket company prepares for what is expected to be a record-setting IPO later this year, potentially bringing in billions of dollars.

SpaceX agrees right to buy AI coding darling Cursor for $60bn

As it vies to catch up with rivals like OpenAI and Anthropic, SpaceX has done a deal to purchase the fast-growing AI coding start-up Cursor. In a post on X, SpaceX said the companies were "now working closely together to create the world's best coding and knowledge work AI" and that "Cursor has also given SpaceX the right to acquire Cursor later this year for $60bn or pay $10bn for our work together." In its own statement Cursor confirmed it was partnering with SpaceX "to accelerate our model training efforts", which it said had been stymied by lack of compute. "With this partnership, our team will leverage xAI's Colossus infrastructure to dramatically scale up the intelligence of our models," it said. Cursor had been widely reported to be raising a $2bn round at a $50bn valuation in recent days, as it sought investment to increase compute, but that raise will now be halted, as the SpaceX deal will offer it all the compute it needs to expand. It is likely that the reason SpaceX has bought the rights to purchase Cursor, rather than acquiring it straight off is that the space tech and AI giant is keen to win the race to IPO, and any acquisition of such a size would require it to refile for IPO. Reports have suggested a SpaceX IPO between April and June, which means it would precede speculated listings by rival AI giants OpenAI and Anthropic in the near future. Elon Musk has consolidated various businesses over the past year to arrive at a mooted $1.75trn valuation. In February, SpaceX acquired xAI, which in March 2025 had acquired X. Revenue growth from SpaceX's Starlink satellite broadband service is widely and largely credited for the foundation of the valuation. Starlink currently dominates the global satellite internet service industry, with more than 9,000 satellites in orbit and roughly 9m customers. The February merger deal valued xAI at around $250bn, but preceded the departure of all 11 of Musk's co-founders from that company. Now Musk looks set to buy in the talent he believes he needs to compete with his major rivals. Cursor is one of the fastest-growing AI start-ups right now, and well-regarded, boasting some very high profile investors, including Nvidia, Andreessen Horowitz, Google - and indeed, OpenAI's venture fund. It remains to be seen whether the expensive acquisition goes ahead, or whether both companies could take up the agreed alternative within the deal to pay $10bn for "our work together". Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.

SpaceX secures option to acquire Cursor for $60 billion

SpaceX has secured an option to acquire code-generation startup Cursor for $60 billion, or pay $10 billion for a new partnership, as it expands into the AI developer tools market. This move positions SpaceX to compete more effectively alongside AI startups like OpenAI and Anthropic, which have gained traction by automating coding for developers. An acquisition could enhance xAI's capabilities, providing a stronger market presence in AI coding. The deal would also enhance Cursor's resources for developing AI models. SpaceX stated, "The combination of Cursor's leading product and distribution to expert software engineers with SpaceX's million H100 equivalent Colossus training supercomputer will allow us to build the world's most useful models." Colossus, located in Memphis, is promoted as the largest supercomputer globally, with SpaceX investing billions into AI infrastructure to bolster its operations. The announcement precedes SpaceX's expected public debut in the coming months, targeting a valuation near $1.75 trillion and a $75 billion fundraise, potentially the largest IPO in history. In March, two engineering heads from Cursor, Andrew Milich and Jason Ginsberg, joined SpaceX to aid in lunar projects and the development of xAI. Elon Musk highlighted this collaboration, stating, "Orbital space centers and mass drivers on the Moon will be incredible."

SpaceX says it has option to acquire startup Cursor for $60 billion

SpaceX is exploring a significant move into AI developer tools by securing an option to acquire code-generation startup Cursor for $60 billion or partner for $10 billion. This push aims to bolster xAI's position in the AI coding market and provide Cursor with enhanced computing power for AI model development. SpaceX said it has secured an option to either acquire code-generation startup Cursor for $60 billion later this year, or pay $10 billion for their new partnership, as it pushes deeper into the lucrative market for AI developer tools. Along with OpenAI and Anthropic, Cursor is one of several Silicon Valley startups that ⁠have ⁠drawn waves of developers by using artificial intelligence to automate coding, a business where AI companies have found early commercial traction. The deal could give xAI, the Grok chatbot maker that SpaceX merged with in February, a stronger foothold in the AI coding market where it has so far lagged rivals. It also provides Cursor with ⁠more computing capacity to develop AI models. "The combination of Cursor's leading product and distribution to expert software engineers with SpaceX's ⁠million H100 equivalent Colossus training supercomputer will allow us to build the world's most useful models," SpaceX said in an X post on Tuesday. Colossus is xAI's supercomputer cluster in Memphis, which it has touted as the largest in the world. The company has been spending billions of dollars on AI infrastructure. The announcement comes ahead of SpaceX's highly anticipated public debut in the coming months, with the company eyeing a valuation of close to $1.75 trillion and a $75 billion fundraise that could go down as ⁠the biggest IPO in history. Two product engineering heads at Cursor, a startup that sells AI models for coding tasks, said in March they joined SpaceX to contribute to the company's lunar projects and xAI, Musk's AI startup that is now part of SpaceX. Musk welcomed the engineers, Andrew Milich and Jason Ginsberg, saying, "Orbital space centers and mass drivers on the Moon will be incredible."

Here's How SpaceX's $60 Billion Cursor Deal Really Works - Tesla (NASDAQ:TSLA)

Former White House AI czar David Sacks confirmed the structure of Elon Musk's Cursor play on the All-In podcast Friday. By the end of 2026, SpaceX will either acquire the AI coding startup for $60 billion or pay it $10 billion to walk away. Sacks, also a SpaceX investor, framed the $10 billion as the cost of a one-year option on the hottest application in AI. The Hottest Application In AI Cursor, built by Anysphere, has become the one of the leading IDE's for AI-assisted coding. Its run rate hit $2 billion in February and is projected at $6 billion by the end of 2026, which would triple its top line in under a year. It also defines a category that every foundation model lab now wants to own. Cursor was rumored to be raising at a $50 billion valuation before the SpaceX deal landed at $60 billion. Cursor Trapped Between Codex And Claude Code Cursor's problem was that it ran on top of OpenAI and Anthropic models, and both providers have spent the last year vertically integrating into coding via Codex and Claude Code. Sacks framed it on the pod as a startup competing against the same companies it depended on for its core product. The xAI alliance gives Cursor a foundation model partner that is not also a competitor, plus access to the 550,000 GPUs in Elon Musk's Colossus cluster, which is scaling toward one million. In return, xAI gets Cursor's enterprise install base, training data, and the IDE itself, which Chamath Palihapitiya called the most valuable third-party application layer in AI right now. Palihapitiya is also a SpaceX shareholder. The IPO Math SpaceX is targeting a $2 trillion IPO valuation. A $60 billion stock-for-stock deal at that level lands at roughly a 50% discount on a fully diluted basis if the IPO prints, per Palihapitiya. Musk effectively gets to issue tomorrow's stock at today's price to pay for an asset he wants now. Polymarket and Kalshi each have a market on whether SpaceX acquires Cursor this year. They trade at roughly 74% and 83% respectively, though both are thinly traded. The Polymarket contract on a Cursor IPO before 2027 has collapsed from around 15% to 7% on the news. Traders are pricing acquisition, not listing. Tesla Is The Public Proxy If Polymarket's 74% is right, Cursor's enterprise revenue and developer base land inside the same orbit Tesla is already paying to ride. If it is wrong, Cursor walks away with the most expensive breakup fee in AI history. Image: Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Microsoft Reportedly Eyed Cursor Before SpaceX's $60 Billion Deal -- But Chose Not To Proceed - Microsoft (

Microsoft Corp. (NASDAQ:MSFT) had been reportedly eyeing AI coding startup Cursor before SpaceX made headlines with its $60 billion acquisition option of the company. The Satya Nadella-led company's interest in Cursor was part of its strategy to expand its artificial intelligence tools in the rapidly growing AI market. However, the tech giant ultimately chose not to move forward with a bid, CNBC reported on Wednesday. Microsoft and Cursor did not immediately respond to Benzinga's request for comments. AI Coding Race Heats Up As Cursor Leads Cursor, on the other hand, is part of a new wave of startups that is gaining traction by using AI to automate coding tasks. SpaceX has now secured an option to either acquire Cursor for $60 billion later this year or enter a $10 billion partnership. Copilot Struggles Despite Code Red Push Microsoft's AI offering, Copilot, meanwhile, has been facing investor frustration due to limited traction despite its leadership in SaaS through 365 Commercial Cloud. Earlier this month, Nadella had initiated a "Copilot code red" effort to improve performance and user experience. Copilot has also been lagging behind its competitors, with only 6 million daily active users in March, compared to Claude's 9 million and ChatGPT's 440 million. Price Action: On a year-to-date basis, Microsoft stock declined 8.46%, as per Benzinga Pro. On Wednesday, it climbed 2.07% to close at $432.92. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

SpaceX Strikes $60Bn Deal for Cursor, Beats Microsoft & VCs to the Deal

This could well a win-win deal for both players given that Musk's xAI experiment has floundered and Cursor needs money to keep pace with OpenAI and Anthropic When money isn't a hurdle in ego satiation, business deals become easier. As Elon Musk has once again proved by literally ripping off Cursor's fundraise at a $50 billion valuation with a $60 billion acquisition offer for the AI-powered coding software. However, the deal isn't done yet. For, SpaceX has only given Cursor the option of being acquired sometime later this year for the above mentioned price or could pay $10 billion to the company to collaborate on AI development. The deal isn't a surprise given that Musk's bet on xAI has gone awry since quite some time with its coding capabilities being questionable at best and dubious at worst. The company announced the deal via a post on X (where else?). It said SpaceXAI (err! Whatever is that now?) and Cursor.AI "are now working closely together to create the world's best coding and knowledge work AI. "The combination of Cursor's leading product and distribution to expert software engineers with SpaceX's million H100 equivalent Colossus training supercomputer will allow us to build the world's most useful models. Cursor has also given SpaceX the right to acquire Cursor later this year for $60 billion or pay $10 billion for our work together," the post on the microblogging site read." One could ask what was the hurry for Musk? Well, for starters Cursor was engaged in a $2 billion fundraise talks with investors that include the likes of Thrive, Nvidia, and Andreessen Horowitz. Just as news of the acquisition broke, CNBC reported that Microsoft too was seeking a potential deal with the AI coding startup. This is quite understandable as Microsoft gained traction among developers with their GitHub Copilot, the marketplace for AI-led coding is currently dominated by Cursor alongside Anthropic and OpenAI. Till date, the company has only played the role of an investor or a provider of cloud services. From Elon Musk's point of view, with the AI usage battle increasingly shifting towards enterprise usage, his merged entity comprising SpaceX and xAI badly needed enhanced AI capabilities to better compete with the market leaders. Acquiring Cursor provides Musk with just what the doctor ordered - entry into the top echelons of enterprise AI. So, why the twin offer of a future buyout plus an immediate collab? Someone at Musk's office does not want to take the pains of updating confidential filings for the SpaceX IPO before it gets listed. Also, the world's richest man expects to get his hands on investor monies and then shell out the $60 billion for Cursor. From Cursor's point of view, the deal makes sense as well. Competition has hotted up from Claude Code and OpenAI Codex in recent times. With the two latter named going at each other in preparation for their respective IPOs, Cursor needed funds to even keep pace, forget racing ahead of the others. Given its current position, private investors might have sought a hard bargain on the terms but with SpaceX they're getting $10 billion payout over time with a promise of an acquisition with a higher valuation. Most importantly though, Cursor CEO Michael Truell would be more confident of retaining his team in the SpaceX ecosystem since Musk has already shunted out a large chunk of xAI staff in recent times. Of course, there is also the vast compute capacity that SpaceX has across its datacentres in Mississippi and Tennessee. What better than getting all of this for free or even as part of the $10 billion collaboration payment? As we said upfront, there is no hurdle in making deals when money isn't a challenge and where ego boost is a major objective. Musk would give anything to get back on even keel with his erstwhile friend Sam Altman and his OpenAI.

Elon Musk's SpaceX Targets AI Coding Boom With $60 Billion Cursor Deal Option As Grok Parent Looks To Clo

Elon Musk's SpaceX has secured an option to either acquire AI coding startup Cursor for $60 billion later this year or enter a $10 billion partnership. SpaceX Weighs Acquisition Or Partnership With Cursor SpaceX's official X handle said, "SpaceXAI and @cursor_ai are now working closely together to create the world's best coding and knowledge work AI." Cursor is among a new wave of startups, alongside OpenAI and Anthropic, gaining traction by using artificial intelligence to automate coding tasks -- one of the earliest areas of commercial success for AI. Last week, reports indicated that Cursor is nearing a deal to raise at least $2 billion in new funding at a $50 billion pre-money valuation. Strategic investor Nvidia Corp (NASDAQ:NVDA) is expected to participate, though the terms have not been finalized and remain subject to change. Boosting xAI And Grok's Competitive Edge The potential deal could strengthen xAI, which merged with SpaceX earlier this year and develops the Grok. The company has so far trailed rivals in AI-powered coding tools. "The combination of Cursor's leading product and distribution to expert software engineers with SpaceX's million H100 equivalent Colossus training supercomputer will allow us to build the world's most useful models," the company wrote. Colossus Supercomputer And Talent Moves SpaceX brings significant computing power through its "Colossus" AI cluster in Memphis, touted as one of the largest globally. The company has invested billions into AI infrastructure to accelerate model development. IPO Looms As SpaceX Expands Into AI The move comes ahead of SpaceX's anticipated IPO, where it is reportedly targeting a valuation near $1.75 trillion and a $75 billion raise -- potentially the largest in history. Some analysts have raised concerns about SpaceX's valuation, suggesting that much of the company's upside may already be priced in, potentially limiting returns for investors participating in the IPO. Meanwhile, SpaceX has reportedly moved up its vesting timeline, notifying employees that their stock options will become eligible for sale this month, earlier than the previously scheduled May date. Photo: Thrive Studios ID via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

SpaceX Gains Option to Buy AI Startup Cursor for $60 Billion Ahead of Planned IPO

SpaceX said on April 21 it secured an option to acquire AI coding startup Cursor for $60 billion later this year. The company also said it can choose a second route and pay $10 billion for a partnership instead of completing a full takeover. The announcement links SpaceX more directly with the fast-growing market for AI developer tools as it moves toward a public listing. SpaceX said Cursor's product and user base will combine with its Colossus training infrastructure. The company said the collaboration will focus on AI models for programming and knowledge work. Cursor said the agreement will expand access to computing capacity after training limits slowed growth.

SpaceX says working with Cursor, has option to buy AI startup for $60 bln By Investing.com

Investing.com-- Elon Musk's SpaceX said on Tuesday it is working with Cursor and has been granted the right to acquire the artificial intelligence coding startup later this year for $60 billion. Alternatively, SpaceX can pay $10 billion for a partnership with the startup, the company said in a social media statement. Get more breaking news on SpaceX as it heads for a bumper IPO-- subscribe to InvestingPro "The combination of Cursor's leading product and distribution to expert software engineers with SpaceX's million H100 equivalent Colossus training supercomputer will allow us to build the world's most useful models," SpaceX said. SpaceX's announcement comes just a week after a report said xAI- Musk's AI startup that was folded into SpaceX- would rent out its computing power to Cursor, and that the latter would train its most advanced models on xAI hardware. Last month, two senior engineering heads at Cursor left the startup to join xAI. A report last month showed Cursor eyeing a $50 billion valuation in a private fundraising round, with the company seen as one of the fastest growing AI coding platforms. But both Cursor and xAI lag rivals such as OpenAI and Anthropic in producing advanced in-house AI models-- a flaw that the SpaceX tie-up may be aimed at fixing. AI coding has also emerged as one of the most prominent use cases for the fast-growing technology, with Anthropic seen releasing a slew of coding tools in recent months. Still, the Cursor acquisition represents a major expense for SpaceX, as it heads for a blockbuster initial public offering later this year. The firm, which recently acquired Musk's xAI, is targeting a valuation of roughly $1.75 trillion while raising $75 billion.