SpaceX partners with Cursor, with a potential $60B acquisition option

SpaceX said it has entered into a deal with Cursor to develop a next-generation “coding and knowledge work AI,” which includes a notable provision — an option to acquire the popular software development platform for $60 billion later this year.

The move to partner with and potentially acquire a leading player in the rapidly growing AI coding sector is viewed in the broader context of SpaceX’s expected public offering. Investors anticipating value from the IPO may interpret the deal as another way for Elon Musk’s expanding tech ecosystem to consolidate and extract long-term value across its portfolio.

The agreement is not entirely unexpected for industry observers. Last week, reports indicated that xAI would begin renting computing capacity from Cursor’s infrastructure, with the coding startup utilising tens of thousands of xAI chips to train its latest AI models. In addition, two senior Cursor engineering leaders, Andrew Milich and Jason Ginsberg, reportedly left the company last month to join xAI, where they now report directly to Musk.

SpaceX described the collaboration as combining Cursor’s “product and distribution to expert software engineers” with its own Colossus supercomputer, which the company claims delivers computing power equivalent to one million Nvidia H100 chips.

Under the terms of the agreement, SpaceX said it will either pay Cursor $10 billion for its work at a later stage this year or proceed with a full acquisition valued at $60 billion. Earlier reports also suggested that Cursor was targeting a $50 billion valuation in a forthcoming private funding round. That valuation trajectory marks a dramatic rise, with Cursor valued at $2.5 billion in January of last year, $9 billion by May, and $29.3 billion post-money after closing a $2.3 billion Series D round in November.

Either outcome would represent a significant financial commitment for SpaceX, which is widely perceived to be under heavy investment pressure following its involvement with xAI and the social media platform X. The company is also expected to continue making large-scale capital expenditures across its operations. The statement did not clarify whether any part of the deal could be completed using SpaceX equity.

The partnership could help address gaps within both organisations, but it also highlights structural limitations. Neither Cursor nor xAI currently operates proprietary AI models that match the leading systems developed by Anthropic and OpenAI, both of which also compete directly in the developer tools market.

At present, Cursor continues to rely on and resell access to Claude and GPT-based models, even as Anthropic and OpenAI expand their own coding-focused products. The evolving relationship suggests that this new SpaceX partnership may eventually aim to reduce that dependency and reshape Cursor’s underlying technology stack.