SPACE X
A new tool for xAI’s rebuild
SpaceX has agreed to buy AI coding startup Cursor in a $60 billion all-stock deal, just days after its record-breaking IPO.
Cursor, built by Anysphere, is an AI coding tool that helps developers plan, write and review code faster using AI agents.
The deal is meant to boost SpaceX’s AI division, which was built around Elon Musk’s xAI after the two companies merged earlier this year.
That division has become a major part of SpaceX’s investor pitch, but it has also been dealing with a messy reset after safety concerns, leadership exits, and controversy around Grok-generated content.
SpaceX said the deal is expected to close in the third quarter of this year.
Before SpaceX stepped in, Cursor was reportedly preparing to raise $2 billion from investors including Andreessen Horowitz, Thrive and Nvidia.
That round would have valued the AI coding startup at around $50 billion, while SpaceX’s offer puts it at $60 billion in stock.
Cursor, founded in 2022 as Anysphere, has grown quickly as AI coding tools became one of the hottest corners of the tech market.
The company went through OpenAI’s startup accelerator in 2024 and later raised several major funding rounds, reaching a reported valuation of around $29 billion before the SpaceX deal was announced.
SpaceX’s interest had been building for months. xAI hired two of Cursor’s senior engineering leaders earlier this year, and reportedly rented out some of its data centre capacity to the startup in April.
The main takeaways:
SpaceX is buying Cursor for $60 billion in stock to strengthen its AI division.
Cursor was already one of the fastest-growing AI coding startups, with major investor interest.
SpaceX is making a huge bet on AI, but its xAI division is still being rebuilt after controversy and leadership exits.
Your move, Microsoft Excel
The timing also matters. xAI has been going through a major rebuild after reports that all 11 of Musk’s original co-founders had left by the end of March.
Musk later said the company “was not built right” the first time, which is one way to describe a corporate renovation with the subtlety of a demolition crew.
During its IPO process, SpaceX reportedly told investors it saw a total market opportunity of around $28 trillion, with most of that tied to AI.
That includes AI infrastructure, enterprise software, and even plans for satellite-based AI compute.
Now, SpaceX is betting on Cursor to help make those AI ambitions look less like a slide deck and more like an actual business.
The IPO pitch had a $28 trillion market opportunity, which is a number so large it starts behaving like astrology. -MG