SpaceX, whose Starbase launch site is seen here, is acquiring AI coding startup Cursor in a $60 billion stock deal.
In its first major deal since going public, Elon Musk’s SpaceX Corp. is acquiring the parent company of artificial intelligence code-writing startup Cursor for $60 billion in stock.
The Texas company announced the move in a filing Tuesday, saying it expects the deal to close in the third quarter. It comes just days after the rocket-maker debuted on the Nasdaq in the largest-ever initial public offering.
The purchase of the tool that aims to automate coding had been expected. In April, Cursor gave SpaceX the right to acquire its agent later in the year outright for $60 billion or to partner for $10 billion. At the time, SpaceX said Cursor’s leading product and expert software engineers combined with SpaceX’s “Colossus” AI training supercomputer would create useful models.
While SpaceX is primarily known for its spacecraft, including the massive Starship rocket that blasts off from Starbase in South Texas, Musk recently merged the company with xAI with the aim of furthering AI projects.
“Current advances in AI are dependent on large terrestrial data centers, which require immense amounts of power and cooling,” Musk said. “Global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term, without imposing hardship on communities and the environment. In the long term, space-based AI is obviously the only way to scale.”
SpaceX says it has worked for the past few months with Cursor to jointly train a model that will be released soon by both companies’ AI agents. SpaceX’s agent is known as Grok Build, a coding tool intended for use by software engineers rather than the non-enterprise users who have been drawn to xAI’s Grok chatbot. The latter came under fire earlier this year after it generated millions of sexualized images.
Though Cursor has recently faced talk that it’s “dead” amid competition from Anthropic’s Claude Code, the tool has seen a meteoric rise since its release in 2023. Nearly 70% of Fortune 500 companies use the platform, and it has worked with investors such as Accel, Thrive, and Andreessen Horowitz.
Ahead of its deal with SpaceX, Cursor lost critical talent, including engineers Jason Ginsberg and Andrew Milich, who moved to Musk’s xAI.
Musk posted about the acquisition Tuesday, saying it would achieve “Stockfish-level coding,” referencing a chess engine that is widely used by grandmasters.
Musk continued to preach AI’s capabilities in another post: “It is humbling to consider that if we harness just 1 millionth of the Sun’s power for AI, that will be much more than a million times the intelligence of all of humanity.”