SpaceX to acquire AI coding startup Cursor in $60 billion deal

SpaceX announced plans to acquire AI coding startup Cursor in a deal valued at $60 billion, marking the company's first major acquisition following its historic public listing.

Business Insider reported the transaction follows a partnership established earlier this year between the two companies and highlights the accelerating race among technology firms to secure advanced artificial intelligence capabilities, particularly in software development.

The acquisition represents a remarkable rise for Cursor, which has emerged as one of Silicon Valley's fastest-growing AI startups since its launch in 2022.

Cursor's Rapid Rise in the AI Coding Market

Founded in 2022 by Michael Truell and three fellow entrepreneurs who met at the Massachusetts Institute of Technology, Cursor has become one of the leading providers of AI-powered coding tools.

The company's software helps developers write, edit and review code more efficiently, part of a broader wave of AI products reshaping the software industry by making programming faster and more accessible.

Cursor's growth has been rapid. The company revealed in November that its annualised revenue had surged more than tenfold in less than a year, exceeding $1 billion.

Earlier this week, Truell, 25, discussed the potential merger with employees, describing it as "a big risk, or a big bet, that we're making," according to a Business Insider report.

Partnership Paved the Way for Acquisition

The acquisition follows a collaboration agreement signed by SpaceX and Cursor in April 2026.

Under that arrangement, the companies worked together on computing infrastructure and AI training projects. The agreement reportedly included an option allowing SpaceX either to acquire Cursor for $60 billion or pay $10 billion for the work completed through the partnership.

The collaboration was seen as a significant step in Musk's broader effort to expand SpaceX's artificial intelligence capabilities following the integration of AI company xAI earlier this year.

SpaceX Expands AI Ambitions After Record IPO

The deal comes just days after SpaceX completed what was described as the largest IPO in history, raising $85 billion.

Investor enthusiasm has continued since the company's market debut. SpaceX closed Monday with a valuation of approximately $2.5 trillion, placing it among the world's most valuable publicly traded companies.

Despite its growing size, SpaceX has faced increasing pressure to strengthen its position in artificial intelligence.

Grok, the AI model originally developed by Musk's xAI venture before its merger with SpaceX in February, has trailed leading competitors from OpenAI, Anthropic and Google, particularly in coding-related tasks.

Cursor Expected to Strengthen Grok Development

Cursor's technology is expected to play a key role in improving Grok's coding capabilities and accelerating future AI development efforts at SpaceX.

The startup had already been contributing to Grok's development through the companies' earlier partnership. In recent months, Musk has said on social media that newer versions of Grok showed improved performance after being trained using substantial amounts of Cursor-generated data.

The acquisition also follows a period of significant change within SpaceX's AI operations, including leadership departures and organisational restructuring after xAI was absorbed into the company.

With the purchase of Cursor, SpaceX is making one of the largest AI acquisitions ever completed and signalling that software development tools will remain central to the next phase of the artificial intelligence race.