Elon Musk's SpaceX aims for AI dominance with massive $60 billion Cursor acquisition

Following its merger with xAI, SpaceX targets the leading AI code editor to build an integrated development platform using the Colossus supercomputer.

Elon Musk's SpaceX has announced on X that it has obtained the rights to buy the coding startup, Cursor, for $60 billion later this year. The company said that it is working closely together with Cursor to "create the world's best coding and knowledge work AI."

It said that the partnership will combine Cursor's leading product and distribution know-how and expert software engineers with SpaceX's million H100 equivalent Colossus training supercomputer. It said this will allow them to make the world's most useful models.

According to SpaceX, the agreement allows it to buy Cursor later this year for $60 billion, or pay $10 billion for the work it is doing now with the startup. Cursor's CEO also posted on X saying that he is "Excited to partner with the SpaceX team to scale up Composer," Cursor's AI model.

For anyone confused as to why a space company is getting into building an IDE, that would be because Elon Musk merged SpaceX and xAI in February in a deal valued at $1.25 trillion. This entity could IPO later this year and would likely set records.

Cursor is currently in talks to raise $2 billion at a valuation of $50 billion, according to CNBC, who reported this over the weekend. The funding round is being led by Andreessen Horowitz, with NVIDIA and Thrive Capital also contributing. Both Horowitz and NVIDIA are backers of xAI.

By working closely with team, and potentially buying it later in the year, it gives xAI a chance to catch up with Google, Anthropic, and OpenAI which each have a foothold in software development with tools like Antigravity, Claude Code, and Codex.