SpaceX secured a $60 billion option to acquire AI coding startup Cursor, positioning Elon Musk’s rocket company as a serious contender in artificial intelligence ahead of its record-breaking public offering.
The deal announced on April 21 gives SpaceX two paths forward: purchase Cursor outright later this year for $60 billion, or pay $10 billion for their collaborative work developing next-generation coding AI. The partnership combines Cursor’s software development platform with SpaceX’s Colossus supercomputer, which the company claims has compute power equivalent to one million Nvidia H100 chips.
“SpaceXAI and @cursor_ai are now working closely together to create the world’s best coding and knowledge work AI,”
the company posted on X. Cursor CEO Michael Truell called it “a meaningful step on our path to build the best place to code with AI.”
The timing matches SpaceX’s preparation for what analysts expect will be the largest initial public offering in history. Confidential filings earlier this year set the stage for a stock market listing as early as June, with media reports suggesting valuations could reach $1.75 trillion or more.
This follows SpaceX’s absorption of Musk’s xAI artificial intelligence outfit in February, a move Musk described as “not just the next chapter, but the next book” for his companies.
Cursor represents a direct challenge to established AI coding tools from OpenAI and Anthropic. Founded in 2022 and based in San Francisco, the startup specializes in AI for creating software code, particularly for business applications.
Its valuation has skyrocketed from $2.5 billion in January 2025 to reportedly seeking over $50 billion in current funding talks. The partnership addresses weaknesses at both companies. Neither Cursor nor xAI has proprietary models matching leading offerings from Anthropic and OpenAI, the same firms now competing directly with Cursor for developer market share.
Cursor still uses and sells access to Claude and GPT models even as those companies roll out competing coding tools.
For SpaceX, the deal provides critical AI capabilities as it expands beyond rockets and satellites into orbital data centers powered by solar energy. Musk has outlined plans to launch satellite-based data centers that could “enable self-growing bases on the moon, an entire civilization on Mars,” citing space’s advantage of constant sunlight over Earth’s power constraints.
The arrangement follows recent personnel moves between the companies. Two senior engineering leaders from Cursor, Andrew Milich and Jason Ginsberg, left last month to join xAI, where both report directly to Musk.
Last week brought reports that xAI would begin renting computing power from its data centers to Cursor for training its latest AI model.
If executed, either payment option would represent significant capital expenditure for SpaceX following its acquisition of xAI and social network X. The company did not specify whether payments could be made in SpaceX stock rather than cash.
SpaceX faces immediate competition beyond traditional tech rivals. Amazon purchased satellite company GlobalStar for more than $11 billion last week and struck an agreement with Apple to operate satellite internet on iPhones and Apple Watches, positioning itself as Starlink’s leading competitor in space-based connectivity.
