SpaceX Announces $60 Billion All-Stock Deal to Buy Cursor Following Historic IPO

SpaceX has agreed to acquire AI coding startup Cursor in an all-stock transaction valued at $60 billion, just days after completing its record-breaking initial public offering and less than two months after the companies announced a strategic partnership.

The acquisition is expected to strengthen SpaceX’s AI business, which now operates around Elon Musk’s AI company xAI following its merger with SpaceX earlier this year. The AI division has faced growing scrutiny in recent months after a series of controversies, including incidents involving the generation of non-consensual deepfakes and other harmful AI outputs.

SpaceX announced on Tuesday that it expects the acquisition to close during the third quarter of this year.

Before agreeing to the deal, Cursor had been preparing to raise $2 billion from investors, including Andreessen Horowitz, Thrive Capital, and Nvidia. This financing round would have valued the company at approximately $50 billion.

In April, ahead of its IPO, SpaceX disclosed an unusual agreement stating it would either acquire Cursor for $60 billion in stock or pay a $10 billion termination fee if the transaction failed to close.

At the time, Cursor was experiencing rapid growth. However, one source indicated that the planned funding round would still not have been sufficient to move the company toward profitability, despite its 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 quickly became one of the fastest-growing AI coding platforms as demand for AI-powered software development tools accelerated. After participating in OpenAI’s startup accelerator in 2024, the company secured multiple funding rounds that pushed its valuation to roughly $29 billion before SpaceX’s acquisition plans emerged.

Signs of a closer relationship surfaced earlier this year when xAI hired two senior Cursor engineering leaders. In April, Business Insider also reported that xAI planned to lease data centre capacity to Cursor, similar to infrastructure partnerships SpaceX had previously established with Anthropic and Google before its IPO. Those discussions ultimately developed into the acquisition agreement now nearing completion.

The transaction also comes during a period of significant restructuring within xAI. By the end of March, all 11 of Musk’s original co-founders had left the company, while Musk publicly acknowledged that xAI required rebuilding from the ground up. The company has also faced legal challenges following previous controversies involving its Grok chatbot and AI-generated harmful content.

SpaceX’s AI ambitions played a major role during its IPO, where investors were told the company sees a total addressable market of approximately $28 trillion, including an estimated $2.4 trillion opportunity in AI infrastructure and roughly $22.7 trillion in enterprise AI applications.

Cursor is expected to become a key part of SpaceX’s strategy to achieve those long-term goals. The timing of the acquisition has also benefited from SpaceX’s soaring share price. Since its public debut at $135 per share, the company’s stock has climbed above $200 in pre-market trading, adding nearly $1 trillion to its market value in just a few days and making the $60 billion acquisition significantly easier to finance.