SpaceX locks $60 billion Cursor deal, secures option to acquire AI startup later this year

SpaceX has entered into a partnership with artificial intelligence startup Cursor to build a next-generation coding and knowledge work AI, while securing an option to acquire the company for $60 billion later this year or alternatively pay $10 billion for joint development work.

In a post on X, SpaceX said it is "now working closely together to create the world's best coding and knowledge work AI." Cursor chief executive officer Michael Truell said he was "excited to partner with the SpaceX team to scale up Composer," referring to the company's AI model.

The agreement outlines two possible outcomes. SpaceX can either proceed with a full acquisition of Cursor at a $60 billion valuation or compensate the startup $10 billion for its contribution to the joint project. The company did not disclose how the transaction would be structured or whether stock could be involved.

The collaboration combines Cursor's developer-focused products and distribution with SpaceX's Colossus supercomputer, which the company said delivers compute capacity equivalent to one million Nvidia H100 chips. The partnership comes amid growing efforts by SpaceX and its affiliated AI unit xAI to strengthen capabilities in AI-driven coding tools.

Recent developments indicate closer ties between the companies. xAI has begun providing computing resources to Cursor, with the startup using large volumes of chips to train its latest model. Two senior Cursor engineers, Andrew Milich and Jason Ginsberg, also moved to xAI and now report directly to Elon Musk.

Cursor has seen a sharp rise in valuation over the past year. It was valued at $2.5 billion early last year, increased to $9 billion within months, and reached a $29.3 billion post-money valuation after a $2.3 billion funding round in November. The company is currently in discussions to raise $2 billion at a valuation exceeding $50 billion.

The deal comes as SpaceX prepares for a potential public offering, with the partnership seen as part of broader efforts to expand its artificial intelligence footprint. Both Cursor and xAI currently rely on models from competitors such as OpenAI and Anthropic while building their own capabilities in the developer tools segment.