xAI partners with Cursor in $10 billion deal to supercharge AI coding capabilities

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Elon Musk's AI venture is betting big on the coding assistant startup, with a $60 billion acquisition option waiting in the wings for 2026.

Elon Musk’s xAI has struck a partnership with Cursor, the AI-powered coding assistant, backing it with a $10 billion investment and an option to acquire the startup outright for $60 billion in 2026.

The structure here is worth unpacking. xAI is investing $10 billion into Cursor now, with an option to buy the company for $60 billion that becomes exercisable in 2026. If xAI decides to walk away from the acquisition, there’s a $10 billion breakup fee attached.

xAI partners with Cursor in $10 billion deal to supercharge AI coding capabilities

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