SpaceX Secures $60 Billion Option to Acquire AI Coding Giant Cursor
Elon Musk’s space and technology company SpaceX has secured the right to acquire AI coding startup Cursor for $60 billion still this year. The announcement comes just a few months before SpaceX’s expected IPO, which is set to value the company at around $1.75 trillion and become the largest IPO in history.
What Is Cursor?
Cursor is an AI-powered programming tool that supports software developers in their daily work. The product of the company Anysphere, founded in 2022, it is one of the fastest-growing startups in Silicon Valley. Cursor automates parts of the programming process, significantly boosting developer productivity.
The company most recently achieved an annualized revenue of over two billion dollars and was valued at $29 billion in November 2025. For the development of its products, Cursor uses AI models from OpenAI, Anthropic, xAI, and Google, but also has its own in-house LLM called “Composer,” which is also based on a Chinese open-source model. The partnership with SpaceX is now set to give the company access to significantly more computing capacity.
The Deal Structure: Option or Billion-Dollar Breakup Fee
Trending Topics Newsletter
2x weekly for free – don’t miss any stories!
The agreement stipulates that SpaceX either exercises the option and fully acquires Anysphere for $60 billion, or foregoes the acquisition and in that case pays ten billion dollars for the joint collaboration. The latter would represent one of the largest breakup payments in corporate history.
“We think SpaceX is the best company in the world when it comes to building computing capacity. The achievements they have accomplished are extraordinary.” (Oskar Schulz, President of Anysphere)
SpaceX stated that both companies are working together to “create the world’s best AI for coding and knowledge work.” Cursor is set to build on SpaceX’s massive computing capacities, including the Colossus supercomputer in Memphis, which was built within 122 days.
xAI Plays Hardly Any Role in the Coding Space
The deal reveals a strategic weakness of Musk’s own AI lab xAI. While competitors such as OpenAI with its Codex model and Anthropic with Claude Code already offer established and widely used coding tools, xAI has so far been unable to build a comparable market position in this area. Musk founded xAI in 2023 with the goal of challenging OpenAI and Anthropic, but the lab’s models have so far lagged behind in direct comparison.
With the acquisition of Cursor, SpaceX would acquire an existing customer base among software developers as well as proven products, rather than building this position organically. Cursor is set to further develop its own Composer model while using SpaceX’s infrastructure.
Cursor’s Model Is Based on Chinese Open-Source Technology
One detail attracting attention ahead of the possible acquisition: the latest version of Cursor’s own Composer model was developed on the basis of an open-source model from Chinese startup Moonshot AI. This raises questions about the technological independence of the company that SpaceX wishes to acquire for $60 billion.
Cursor thus faces a structural dilemma: on the one hand, the company is dependent on models from external providers; on the other hand, it is coming under pressure as these very providers are increasingly bringing their own coding tools to market, thereby entering into direct competition with Cursor.
IPO in the Shadow of the Deal Flood
The possible Cursor deal is part of a series of mergers and acquisitions with which Musk has restructured his corporate empire in recent months. In March 2025, he merged his social media platform X with xAI, before both entities were integrated into SpaceX in February 2026. The valuation of the combined group currently stands at $1.25 trillion.
For investors and banks accompanying the upcoming IPO, the large number of transactions makes it more difficult to value the company. xAI recorded a loss of $6.4 billion in 2025, while Starlink, SpaceX’s satellite internet division, achieved an operating profit of $4.42 billion in the same year. Musk also plans to secure control over the overall group through special voting rights.
