SpaceX announced that it has obtained the right to acquire artificial intelligence coding startup Cursor for $60 billion, with the deal expected to close by the end of the year or SpaceX will pay Cursor $10 billion instead [1]. This development comes after Microsoft considered purchasing Cursor in recent weeks but ultimately decided not to make an offer, according to sources familiar with the matter [1]. The announcement from SpaceX reportedly surprised prospective investors, as venture capital firms had been preparing to finance Cursor at a $50 billion valuation earlier this month, highlighting the intense demand for AI coding tools [1].
SpaceX, controlled by Elon Musk, stated on X that 'SpaceXAI and @cursor_ai are now working closely together to create the world's best coding and knowledge work AI.' Cursor CEO Michael Truell also expressed enthusiasm for the partnership, noting plans to scale up the company's AI model, Composer [1]. In the lead-up to the deal, SpaceX had offered Cursor access to compute resources [1].
The AI coding market is currently led by Cursor, Anthropic, and OpenAI. Microsoft, while a major investor and cloud provider for Anthropic and OpenAI, has focused on its GitHub Copilot product, which reached 4.7 million paying subscribers as of January, a 75% increase year-over-year [1]. However, Microsoft's stock price has dropped 10% this year, underperforming the broader market and its hyperscaler peers [1]. OpenAI's Codex programming app recently reached 4 million active users, and Anthropic's Claude Code service has helped the company achieve $30 billion in annualized revenue this month [1].
This acquisition follows Musk's February merger of SpaceX with his AI startup xAI, in a deal valued at $1.25 trillion, with plans underway to take the combined company public in what is expected to be a record IPO [1].
CONCLUSION
SpaceX's $60 billion agreement to acquire Cursor marks a significant escalation in the competition for dominance in the AI coding market, surpassing both venture capital valuations and Microsoft's recent interest. The deal underscores the rapidly growing demand for advanced AI coding tools and positions SpaceX as a major player in the sector.