SpaceX has formally agreed to take over Cursor in a deal that values the artificial intelligence coding startup at $60 billion, cementing a key part of Elon Musk’s efforts to catch up with rivals on coding tools.
Cursor investors will have the right to receive SpaceX stock based on the implied $60 billion equity value of the startup, according to a regulatory filing Tuesday. The deal is expected to close in the third quarter. SpaceX first revealed in April that it had secured the right to buy Cursor later this year but was holding off because of the rocket company’s initial public offering.
SpaceX is pushing ahead with the Cursor transaction just days after completing the record IPO. The stock surged more than 40% in its first two trading sessions, underscoring the strong demand from investors seeking to tap into the company’s growth prospects.
The rally continued Tuesday, with shares climbing 6% as of 7:37 a.m. before regular trading in New York. If the gains hold when markets open, SpaceX would have a market valuation of around $2.7 trillion and surpass Amazon.com Inc. as the fifth-largest publicly traded company in the world.
SpaceX’s xAI business is now focused on bolstering its AI-powered coding capabilities. Musk has said xAI lags behind rivals on that front in particular and has recruited engineers from Cursor in an effort to catch up with the likes of Anthropic PBC and OpenAI.
SpaceXAI, as the AI business is now called, has suffered dozens of exits on both the engineering and the data training side and has struggled to recruit top talent that has options to go elsewhere. For now, Musk has put in place leadership from SpaceX’s Starlink to right the ship at xAI.
SpaceX employees at xAI have been working with Cursor in recent weeks, collaborating on coding and compute, Bloomberg has reported.
Cursor’s AI assistant, launched in 2023, is designed to help programmers write and debug code more efficiently. It’s become one of the fastest-growing startups of all time and a central player in tech’s “vibe coding” era, as demand surges among software developers for tools that can build based on prompts to a chatbot.
Before SpaceX announced an intent to buy Cursor, the startup had been in talks with investors for a funding round that valued it at more than $50 billion, Bloomberg reported previously.
Musk’s bets on AI have proven costly for SpaceX, which posted a $4.94 billion net loss last year as the company retroactively took on the debt of xAI’s investments. Capital expenditures fueling Musk’s plans nearly doubled to $20.7 billion last year. The biggest single spending block of that is dedicated to AI.
Although SpaceX has been renting out its data center capacity to competitors including Anthropic, Chief Financial Officer Bret Johnsen said last week that the company is not giving up on its own services, including its chatbot Grok.
