SpaceX plans $60 billion bet on AI startup cursor

New Delhi: SpaceX has said it may buy AI coding startup Cursor later this year for $60 billion, or pay $10 billion for their ongoing partnership. The company shared this update on X, adding that both sides are now working together to build better AI tools for coding and general knowledge work.

This move comes as SpaceX tries to catch up in the fast-growing AI coding space. The company recently combined its operations with xAI, which is owned by Elon Musk. Musk had earlier admitted that xAI is behind competitors in coding tools and said he wants to rebuild the company's efforts from scratch.

What the deal means

As part of this shift, Musk has already made internal changes, including layoffs in March and a push to hire more engineers. Cursor has also been a source of talent, with some hires coming from the startup earlier. At the same time, Cursor was in talks to raise around $2 billion from investors at a valuation above $50 billion, Bloomberg reported. Big names like Nvidia and Andreessen Horowitz were expected to take part in that funding round.

Rising competition in AI coding

Cursor's AI assistant, launched in 2023, helps developers write and fix code more easily. It has quickly become one of the fastest-growing startups and is part of what many call the "vibe coding" trend, where AI tools are used to speed up software work.

Cursor president Oskar Schulz said SpaceX has strong computing power, which could help both companies scale their AI models faster. Competition in this space is increasing, with companies like Anthropic and OpenAI also launching tools to simplify coding.