SpaceX has agreed to acquire AI coding startup Cursor in a $60 billion stock deal, finalising an arrangement first announced in April and arriving just days after the space company completed the largest initial public offering in Wall Street history.
The acquisition is intended to strengthen SpaceX’s AI division, which is built around Elon Musk’s AI company xAI following its merger with SpaceX earlier this year. SpaceX said Tuesday the deal is likely to close in the third quarter of this year. The transaction is meant to help SpaceX’s AI ambitions catch up to leading AI labs after the division ran into repeated controversies, including allowing users to generate non-consensual deepfakes of women and children, and went through a period of restructuring despite being positioned as a centrepiece of SpaceX’s IPO pitch to investors.
Before SpaceX intervened, Cursor had been on track to close a $2 billion funding round from investors including Andreessen Horowitz, Thrive, and Nvidia that would have valued the company at $50 billion. Musk’s company preempted that round in April with an unusual structure, agreeing to either buy Cursor for $60 billion in stock or pay a $10 billion breakup fee if the deal collapsed. One source familiar with Cursor’s finances at the time said the $2 billion round it had been planning would not have been enough for the company to reach break-even, despite Cursor having previously raised $900 million in a Series C round in June 2025 and another $2.3 billion later that year.
Founded in 2022 as Anysphere, Cursor rose rapidly as AI-powered coding tools gained widespread adoption over the past two years. The company went through OpenAI’s startup accelerator in 2024 before its valuation climbed to approximately $29 billion ahead of the SpaceX deal.
Signs of SpaceX’s interest in Cursor emerged earlier this year when xAI hired two of the startup’s senior engineering leaders. In April, reports surfaced that xAI had begun renting out data centre capacity to Cursor, a similar arrangement to deals SpaceX struck with Anthropic and Google ahead of its IPO. Those early conversations evolved quickly into the acquisition now being finalised.
The deal closed against the backdrop of significant turmoil at xAI. All 11 of Musk’s co-founders at the company had departed by the end of March, and Musk publicly acknowledged that xAI “was not built right the first time around,” saying he was rebuilding it from the foundations up. The admission followed a series of controversies, including xAI’s Grok chatbot referring to itself as “MechaHitler” in 2025 and the platform allowing users to generate sexual deepfakes of women and children earlier this year, behaviour that prompted a cease-and-desist order from California’s attorney general and which SpaceX has acknowledged as a material risk to its business in IPO filings.
SpaceX’s pitch to investors ahead of its IPO centred heavily on its AI ambitions, with the company telling investors it sees a total addressable market of approximately $28 trillion, nearly all of it tied to AI. That includes a projected $2.4 trillion AI infrastructure business, built in part around plans for a satellite constellation that handles AI compute, and a $22.7 trillion opportunity in enterprise applications.
The acquisition has become considerably easier to absorb financially since SpaceX’s public debut. Since going public last Friday at $135 per share, SpaceX’s stock has climbed to more than $200 per share in pre-market trading, adding nearly $1 trillion to its valuation, roughly the equivalent of 16 Cursors, in the span of a few days.
