SpaceX is working with Cursor and has an option to buy the startup for $60 billion
Source: TechCrunch
Deal Overview
SpaceX announced a partnership with Cursor to develop a next‑generation “coding and knowledge work AI.” The agreement includes a provision that gives SpaceX an option to acquire the popular software development platform for $60 billion later this year.
SpaceX described the collaboration as combining Cursor’s “product and distribution to expert software engineers” with SpaceX’s Colossus supercomputer, which the company claims has the equivalent compute power of a million Nvidia H100 chips.
At an undisclosed point later this year, SpaceX will either pay Cursor $10 billion for its work or acquire the company outright for $60 billion.
Background and Context
- xAI ties: Last week, it was reported that xAI would begin renting computing power from its data centers to Cursor, with the coding startup using tens of thousands of xAI chips to train its latest AI model.
- Talent movement: In the previous month, two of Cursor’s senior engineering leaders, Andrew Milich and Jason Ginsberg, joined xAI, reporting directly to Elon Musk.
Valuation History
- Current fundraising: TechCrunch reported that Cursor is targeting a $50 billion valuation in an upcoming private fundraising round.
- Recent growth:
- January 2025: Valued at $2.5 billion.
- May 2025: Valued at $9 billion.
- November 2025: Closed a Series D round of $2.3 billion, resulting in a $29.3 billion post‑money valuation.
Potential Impact
- Financial considerations: The acquisition would represent a significant expense for SpaceX, which is already dealing with losses from its recent acquisitions of xAI and the social media platform X, as well as extensive capital investment plans. The brief statement did not specify whether the deal could be paid in SpaceX stock.
- Strategic positioning: The partnership could address weaknesses at both companies. However, neither Cursor nor xAI currently has proprietary models that match the leading offerings from Anthropic and OpenAI—companies that now compete directly with Cursor in the developer market.
- Model reliance: Cursor continues to use and sell access to Claude and GPT models while both firms develop their own coding tools, an arrangement the new SpaceX partnership may eventually replace.
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