SpaceX has announced its intention to acquire AI code-generation startup Cursor for $60 billion or pay $10 billion for a partnership later this year.
The deal aims to strengthen xAI’s position in the lucrative market for AI developer tools, where it currently lags behind competitors such as OpenAI and Anthropic.
Cursor is one of several Silicon Valley startups that have attracted developers by using artificial intelligence to automate coding, a business area with early commercial success.
SpaceX’s Colossus supercomputer, touted as the largest in the world, will provide Cursor with more computing capacity for AI model development.
The announcement coincides with SpaceX’s upcoming public debut, aiming for a valuation close to $1.75 trillion and a $75 billion fundraising round that could be the biggest IPO in history.
Two product engineering heads from Cursor have joined SpaceX, contributing to lunar projects and xAI, Musk’s AI startup now part of SpaceX.
Founded by Sualeh Asif, originally from Karachi, Cursor was co-founded with three friends from MIT, who represented Pakistan at the International Math Olympiad from 2016 to 2018.