SpaceX has secured an option to buy AI coding startup Cursor for $60 billion. The deal would fill a gap Elon Musk's xAI has struggled to close on its own: coding tools.
Elon Musk's rocket and satellite company SpaceX has struck an unusual agreement with AI coding startup Cursor. According to a SpaceX post on X, the company has secured an option to acquire Cursor later this year for $60 billion. If the deal falls through, SpaceX will pay a $10 billion breakup fee, The Information reports.
The acquisition would more than double Cursor's valuation, which most recently stood at $27 billion. A planned funding round led by Thrive Capital and Andreessen Horowitz at a $50 billion valuation was halted as part of the deal.
Compute for coding expertise
In a blog post, Cursor is upfront about the reason: a shortage of compute. Training its own Composer models had been held back by limited compute capacity. By tapping into xAI's Colossus infrastructure, which SpaceX controls following its takeover of xAI, Cursor plans to dramatically scale up the intelligence of its models. CEO Michael Truell calls the deal a major step toward building the best place to code with AI.
