SpaceX Agrees to Acquire Cursor for US$60bn
SpaceX has formally agreed to take over Cursor that values the AI coding startup at US$60bn, reflecting Elon Musk’s strategy to compete with the coding tools of rival companies.
According to a recent regulatory filing, Cursor investors will have the right to receive SpaceX stock based on the implied US$60bn equity value of the startup.
SpaceX first revealed in April that it had secured the right to buy Cursor later this year but was waiting for the result of its IPO.
The aerospace company is pushing ahead with the Cursor transaction just days after the IPO, which has since become the biggest IPO in history, with SpaceX valued at US$2.2tn.
Company stock surged more than 40% in its first two trading sessions, reflecting strong demand from investors looking to invest early into the company’s growth prospects.
The acquisition of Cursor by SpaceX is expected to close in the third quarter.
SpaceX reaches a US$2.7tn valuation
SpaceX shares climbed to 9.9% following the take over announcement, raising the company’s market valuation to US$2.7tn, surpassing Amazon and placing it in the top five of the world’s most valuable public-trading companies.
The company’s xAI business will now focus on enhancing its AI-powered coding capabilities. Elon has previously said that xAI is lagging behind rivals with its coding tools and in an effort to change that, he has since recruited engineers from Cursor to compete with the likes of Anthropic and OpenAI.
The business, now called SpaceXAI, has seen multiple exits both in the engineering and data training departments and has struggled to find replacement talent. In the meantime, Elon has sourced leadership roles from SpaceX’s starlink to take the helm of xAI’s direction.
Prior to the acquisition announcement, SpaceX employees have been working closely with Cursor, collaborating on the AI startup’s chatbot and coding projects.
One of Cursors’s key projects is its AI assistant – a chatbot launched in 2023 to help programmers write and debug code more efficiently.
Projects like these have helped position the company as one of the fastest-growing startups of all time and a central figure in the tech industry’s “vibe coding” era – a trend that has seen demand among software developers for tools that can develop code based on prompts to a chatbot.
Elon Musk’s aggressive investment into AI
Prior to SpaceX’s announcement to buy Cursor, the AI startup had been in talks with investors for a funding round that valued it at more than US$50bn.
SpaceX’s plan to acquire Cursor, in addition to developments like the SpaceX-xAI merger reflect Elon’s goal of aggressive investment into the AI boom. Despite these ambitions, SpaceX posted a US$4.94bn net loss in 2025 as the company took on the debt of xAI’s investments.
Capital expenditures driving Musk’s plans nearly doubled to US$20.7bn last year. The biggest single spending block of that amount has been dedicated to AI investment.
Additionally, amid the AI startup competition, SpaceX has been renting out its data centre capacity to AI rival Anthropic.
Despite the two companies working together, SpaceX’s Chief Financial Officer Bret Johnsen says the company has no intention of dropping its own AI services – such as its Grok chatbot – and utilising AI programmes from other companies.
