As it vies to catch up with rivals like OpenAI and Anthropic, SpaceX has done a deal to purchase the fast-growing AI coding start-up Cursor.

In a post on X, SpaceX said the companies were “now working closely together to create the world’s best coding and knowledge work AI” and that “Cursor has also given SpaceX the right to acquire Cursor later this year for $60bn or pay $10bn for our work together.”

In its own statement Cursor confirmed it was partnering with SpaceX “to accelerate our model training efforts”, which it said had been stymied by lack of compute.

“With this partnership, our team will leverage xAI’s Colossus infrastructure to dramatically scale up the intelligence of our models,” it said.

Cursor had been widely reported to be raising a $2bn round at a $50bn valuation in recent days, as it sought investment to increase compute, but that raise will now be halted, as the SpaceX deal will offer it all the compute it needs to expand.

It is likely that the reason SpaceX has bought the rights to purchase Cursor, rather than acquiring it straight off is that the space tech and AI giant is keen to win the race to IPO, and any acquisition of such a size would require it to refile for IPO.

Reports have suggested a SpaceX IPO between April and June, which means it would precede speculated listings by rival AI giants OpenAI and Anthropic in the near future.

Elon  Musk has consolidated various businesses over the past year to arrive at a mooted $1.75trn valuation. In February, SpaceX acquired xAI, which in March 2025 had acquired X.

Revenue growth from SpaceX’s Starlink satellite broadband service is widely and largely credited for the foundation of the valuation. Starlink currently dominates the global satellite internet service industry, with more than 9,000 satellites in orbit and roughly 9m customers.

The February merger deal valued xAI at around $250bn, but preceded the departure of all 11 of Musk’s co-founders from that company. Now Musk looks set to buy in the talent he believes he needs to compete with his major rivals.

Cursor is one of the fastest-growing AI start-ups right now, and well-regarded, boasting some very high profile investors, including Nvidia, Andreessen Horowitz, Google – and indeed, OpenAI’s venture fund. It remains to be seen whether the expensive acquisition goes ahead, or whether both companies could take up the agreed alternative within the deal to pay $10bn for “our work together”.

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