SpaceX Secures Option to Acquire AI Coding Startup Cursor for $60 Billion

TLDR

• SpaceX has an option to buy AI coding startup Cursor for $60 billion later this year
• If no acquisition happens, SpaceX will pay $10 billion for the partnership instead
• Cursor will gain access to xAI’s Colossus supercomputer in Memphis to build AI models
• Cursor was last valued at $29.3 billion in a November funding round
• The deal comes ahead of SpaceX’s anticipated IPO targeting a $1.75 trillion valuation

SpaceX announced Tuesday it has secured an option to acquire AI coding startup Cursor for $60 billion. If the purchase does not happen, SpaceX will pay $10 billion for the ongoing partnership.

The news was shared in a post on X by SpaceX, which said the two companies are already working closely together on coding and AI development.

Cursor is one of the most popular AI coding tools available today. It lets developers switch between AI models from OpenAI, Anthropic, Google, xAI, and others to help write and debug code.

The startup was founded in 2023 by four MIT graduates and was originally an encrypted messaging app. It has since grown into a leading player in the AI coding space.

Cursor was last valued at $29.3 billion after closing a financing round in November 2024. The new deal, if completed, would more than double that valuation.

What Cursor Gets From the Deal

One of the main draws for Cursor is access to Colossus, xAI’s supercomputer cluster based in Memphis, Tennessee. SpaceX describes it as the largest AI supercomputer in the world.

Cursor launched its own AI model called Composer last fall to reduce its reliance on third-party AI labs, which it pays substantial fees to. Access to Colossus could help scale that model further.

SpaceX’s Push Into AI

SpaceX merged with Elon Musk’s AI company xAI earlier this year, folding it into its aerospace operations. The Cursor deal is part of a broader push to compete with OpenAI and Anthropic in the AI tools market.

Cursor competes directly with Anthropic’s Claude Code and OpenAI’s Codex. Two of Cursor’s product engineering heads left the startup in March to join SpaceX and xAI.

SpaceX is also planning a massive IPO in the coming months, targeting a valuation of around $1.75 trillion and a $75 billion fundraise that would rank among the largest in history.

The company has also asked regulators to approve the deployment of up to one million AI satellites, saying solar-powered orbital data centers could handle computing tasks currently done on the ground.

Cursor had previously turned down acquisition interest from several major AI companies, according to the Wall Street Journal.

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