SpaceX has agreed to acquire AI coding startup Cursor in a $60 billion stock deal, announced shortly after the company’s historic IPO and less than two months following an initial tie-up between the two. This acquisition aims to bolster SpaceX’s AI division, which is part of Elon Musk’s xAI initiative, as it seeks to compete with leading AI labs.
The completion of the deal is anticipated in the third quarter of this year. Cursor was on the verge of finalizing a $2 billion funding round before SpaceX’s interest emerged, a round that would have valued the startup at $50 billion, according to TechCrunch.
In April, SpaceX offered to acquire Cursor for $60 billion or pay a $10 billion break-up fee if the deal fell through. Despite expectations for growth, Cursor faced concerns that the planned funding would not be sufficient for sustainability, despite raising $900 million in a Series C round in June 2025 and another $2.3 billion later that year.
Founded in 2022 as Anysphere, Cursor experienced rapid growth in AI-driven coding tools. The startup participated in OpenAI’s accelerator in 2024 and was valued at around $29 billion prior to the SpaceX acquisition announcement.
Signs of SpaceX’s interest in Cursor surfaced when xAI hired two senior engineers from the startup earlier this year. In April, reports indicated that xAI rented out data center capacity to Cursor, indicating a developing relationship. This deal comes amid significant turmoil in xAI, including the departure of all 11 co-founders by the end of March. Musk acknowledged that xAI’s initial structure was inadequate and stated intentions to rebuild the company from the ground up.
xAI has faced controversies, including incidents involving inappropriate chatbot behavior and user-generated harmful content. These controversies pose legal risks to SpaceX’s business, as noted in its IPO filings.
In its IPO presentaion, SpaceX claimed a total addressable market of about $28 trillion, with $26 trillion focused on AI-related efforts. The company envisions a $2.4 trillion market for AI infrastructure and a $22.7 trillion opportunity in enterprise applications. Following the IPO, SpaceX’s stock price surged from $135 to over $200 per share, adding nearly $1 trillion to its valuation in just a few days.
