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SpaceX has agreed<\/a> to acquire AI coding startup Cursor in a $60 billion stock deal, just a few days after the space company\u2019s historic IPO and less than two months after announcing a tie-up between the two<\/a>.<\/p>\n The deal is meant to help SpaceX\u2019s AI division \u2014 built around Elon Musk\u2019s AI company xAI, which SpaceX merged with earlier this year \u2014 catch up to the major AI labs. Despite being a centerpiece of its IPO promises, SpaceX\u2019s AI division has been in the midst of a restructuring after running into repeated controversies, like allowing users to generate non-consensual deepfakes of women and children.<\/p>\n SpaceX said Tuesday that the acquisition is likely to close in the third quarter of this year.<\/p>\n Before SpaceX came knocking, Cursor was on track to close a $2 billion funding round from the likes of Andreessen Horowitz, Thrive, and Nvidia that would have valued the AI coding startup at $50 billion, TechCrunch has reported<\/a>. <\/p>\n Musk\u2019s company announced a curious deal in April ahead of its IPO: It would either buy Cursor for $60 billion in stock, or pay a $10 billion break-up fee if the deal fell through.<\/p>\n Cursor was growing fast when this deal was announced. But one source told TechCrunch at the time that the $2 billion it was planning to raise wasn\u2019t going to be enough to help it break even. That\u2019s despite the startup previously raising $900 million in a Series C in June 2025, and another $2.3 billion in late 2025.<\/p>\n Founded in 2022 as Anysphere, Cursor has been on a meteoric rise as AI-powered coding took off over the last two years. It went through OpenAI\u2019s startup accelerator in 2024 before raising enough money to wind up with a price tag of around $29 billion before the SpaceX deal was announced.<\/p>\n Signs of SpaceX\u2019s interest in Cursor appeared earlier this year when xAI hired two of the startup\u2019s senior engineering leaders. Then, in April, Business Insider reported that xAI had decided to rent out some of its data center capacity to Cursor<\/a> \u2014 a hint of the similar deals that SpaceX struck with Anthropic and Google ahead of its IPO this year. Those conversations between SpaceX and Cursor quickly evolved into the deal that is being finalized now. <\/p>\n The deal also happened at the same time that xAI was falling apart.<\/p>\n All 11 of Musk\u2019s co-founders in xAI had left the company by the end of March, and Musk publicly admitted that xAI \u201cwas not built right [the] first time around\u201d and that he was rebuilding it \u201cfrom the foundations up.\u201d This followed xAI\u2019s Grok chatbot calling itself<\/a> \u201cMechaHitler\u201d in 2025, and allowing users to generate nudes and sexual deepfakes of women and children earlier this year<\/a>. SpaceX told investors in its IPO filings that behavior like this is a risk to its business, and the company currently faces a number of legal challenges as a result of these actions.<\/p>\n xAI\u2019s teardown started as SpaceX started moving toward what would become the biggest IPO in history. In that process, SpaceX and its bankers pitched investors on the idea that the company faced a total addressable market of around $28 trillion. Nearly all of that \u2014 $26 trillion \u2014 was centered around the company\u2019s AI efforts. <\/p>\n SpaceX told investors that it sees a potential $2.4 trillion AI infrastructure business (including its stated plans to build a satellite constellation that handles AI compute) and a $22.7 trillion opportunity in \u201centerprise applications.\u201d<\/p>\n SpaceX is now leaning on Cursor to deliver on some of these promises. But the prospect of acquiring the startup must have seemed even easier to swallow post-IPO: Since going public last Friday, SpaceX\u2019s stock has gone from its IPO price of $135 per share to more than $200 per share in pre-market trading as of Tuesday morning, adding nearly $1 trillion \u2014 or roughly 16 Cursors \u2014 to its valuation in the span of just a few days.<\/p>\n<\/div>\n When you purchase through links in our articles, we may earn a small commission<\/a>. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n