SpaceX has agreed to accumulate AI coding startup Cursor in a $60 billion inventory deal, only a few days after the area firm’s historic IPO and fewer than two months after announcing a tie-up between the two.
The deal is supposed to assist SpaceX’s AI division — constructed round Elon Musk’s AI firm xAI, which SpaceX merged with earlier this yr — catch as much as the most important AI labs. Regardless of being a centerpiece of its IPO guarantees, SpaceX’s AI division has been within the midst of a restructuring after operating into repeated controversies, like permitting customers to generate non-consensual deepfakes of ladies and kids.
SpaceX stated Tuesday that the acquisition is more likely to shut within the third quarter of this yr.
Earlier than SpaceX got here knocking, Cursor was on monitor to shut a $2 billion funding spherical from the likes of Andreessen Horowitz, Thrive, and Nvidia that might have valued the AI coding startup at $50 billion, TechCrunch has reported.
Musk’s firm introduced a curious deal in April forward of its IPO: It might both purchase Cursor for $60 billion in inventory, or pay a $10 billion break-up charge if the deal fell by.
Cursor was rising quick when this deal was introduced. However one supply instructed TechCrunch on the time that the $2 billion it was planning to boost wasn’t going to be sufficient to assist it break even. That’s regardless of the startup beforehand elevating $900 million in a Sequence C in June 2025, and one other $2.3 billion in late 2025.
Based in 2022 as Anysphere, Cursor has been on a meteoric rise as AI-powered coding took off during the last two years. It went by OpenAI’s startup accelerator in 2024 earlier than elevating sufficient cash to wind up with a price ticket of round $29 billion earlier than the SpaceX deal was introduced.
Indicators of SpaceX’s curiosity in Cursor appeared earlier this yr when xAI employed two of the startup’s senior engineering leaders. Then, in April, Enterprise Insider reported that xAI had determined to hire out a few of its data center capacity to Cursor — a touch of the same offers that SpaceX struck with Anthropic and Google forward of its IPO this yr. These conversations between SpaceX and Cursor rapidly developed into the deal that’s being finalized now.
The deal additionally occurred on the identical time that xAI was falling aside.
All 11 of Musk’s co-founders in xAI had left the corporate by the tip of March, and Musk publicly admitted that xAI “was not constructed proper [the] first time round” and that he was rebuilding it “from the foundations up.” This adopted xAI’s Grok chatbot calling itself “MechaHitler” in 2025, and permitting customers to generate nudes and sexual deepfakes of ladies and kids earlier this year. SpaceX instructed buyers in its IPO filings that conduct like it is a threat to its enterprise, and the corporate at present faces quite a few authorized challenges because of these actions.
xAI’s teardown began as SpaceX began transferring towards what would change into the largest IPO in historical past. In that course of, SpaceX and its bankers pitched buyers on the concept the corporate confronted a complete addressable market of round $28 trillion. Practically all of that — $26 trillion — was centered across the firm’s AI efforts.
SpaceX instructed buyers that it sees a possible $2.4 trillion AI infrastructure enterprise (together with its acknowledged plans to construct a satellite tv for pc constellation that handles AI compute) and a $22.7 trillion alternative in “enterprise functions.”
SpaceX is now leaning on Cursor to ship on a few of these guarantees. However the prospect of buying the startup will need to have appeared even simpler to swallow post-IPO: Since going public final Friday, SpaceX’s inventory has gone from its IPO value of $135 per share to greater than $200 per share in pre-market buying and selling as of Tuesday morning, including practically $1 trillion — or roughly 16 Cursors — to its valuation within the span of only a few days.
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