SpaceX Wins Option to Buy Cursor for $60 Billion Before IPO
The agreement gives Elon Musk’s company a route into the fast-growing AI coding market as it looks to strengthen xAI’s position against larger rivals.
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SpaceX said on Tuesday it had secured an option to acquire AI coding startup Cursor for $60 billion later this year, or alternatively pay $10 billion for a new strategic partnership, as it pushes deeper into the market for AI developer tools.
The company said in a post on X that the two are “now working closely together to create the world’s best coding and knowledge work AI.”
Reuters said the deal could give xAI, which became part of SpaceX in February, a stronger foothold in AI coding, where it has so far lagged rivals.
The partnership also gives Cursor access to additional computing capacity as it develops its AI models.
The deal comes ahead of SpaceX’s expected public debut in the coming months.
It is not yet clear whether the company intends to complete any transaction with Cursor before or after the listing, which could take place as early as June.
Cursor, a San Francisco-based startup founded in 2022, develops software tools that assist programmers in writing and editing code.
The company was started by Michael Truell, Sualeh Asif, Aman Sanger and Arvid Lunnemark, who met at the Massachusetts Institute of Technology.
It has grown quickly, reaching about $100 million in annual recurring revenue within two years.
The startup has raised around $3.4 billion from investors including Thrive Capital, Andreessen Horowitz and Accel, and was valued at $29 billion in November. It had also been in discussions to secure additional funding in recent weeks.
Cursor said in a blog post that limited access to computing power had “bottlenecked” its growth.
The agreement with SpaceX is expected to ease that constraint by providing access to infrastructure linked to xAI, including a supercomputer used for training AI models.
Cursor said this would help it “dramatically scale up the intelligence of our models.”
Under the agreement, Cursor could receive a $10 billion capital infusion tied to the collaboration or be acquired outright if SpaceX exercises its option.
The final outcome is likely to depend on how the partnership evolves alongside SpaceX’s planned market debut.
