Why SpaceX is Planning a US$60bn Takeover of Cursor
Elon Musk is planning to develop a next-generation “coding and knowledge work AI” after securing the option to buy software development platform Cursor for US$60bn later this year.
Alternatively, the aerospace manufacturer can also commit US$10bn to a new strategic partnership with the company.
The deal follows recent reports of Musk’s xAI renting computing power to Cursor, after which the coding startup used tens of thousands of xAI chips to train its latest model.
Building ‘world’s most useful models’
In a post on X announcing the deal, SpaceX and Cursor pledged to build the world’s most useful models.
The acquisition will bring together Cursor’s “leading product and distribution to expert software engineers with SpaceX’s million H100 equivalent Colossus training supercomputer”.
In 2025, Cursor released its first agentic coding mode, Composer. Since then, Composer 1.5 scaled reinforcement learning by more than 20 times.
Cursor states: “Composer 2 then added continued pretraining, reaching frontier-level performance at a fraction of the cost of other models. Each step up in compute has translated to meaningfully more capable models.”
However, the team notes that training efforts were previously bottlenecked by compute. Being acquired gives Cursor the opportunity to leverage the Colossus infrastructure at xAI to scale the intelligence of its models.
SpaceX targets top spot in AI
The deal comes ahead of SpaceX’s upcoming IPO, where Elon plans to transform the rocket company into an AI powerhouse. SpaceX was merged with xAI earlier this year to aid the move.
Targeted for June 2026, the IPO aims for a valuation between US$1.75tn and US$1.8tn, potentially making it the largest in history.
However, the US$60bn purchase option represents a significant expense for SpaceX. The organisation is widely seen to be losing money following the acquisition of xAI and X.
On the other hand, Anysphere, the San Francisco-based startup that developed Cursor, has raised more than US$3bn since its founding in 2022. As per reports by TechCrunch, the firm is eyeing a US$50bn valuation in an upcoming fundraising round.
This figure reflects a period of rapid growth for the organisation. Cursor was valued at US$2.5bn in January 2025, reaching US$29.3bn raised by November 2025 following a Series D round.
However, on a broader scale, neither Cursor nor xAI possesses proprietary models that match the leading offerings from Anthropic or OpenAI, firms that are now competing directly with Cursor for the software developer market.
Its tie-up with SpaceX demonstrates how Gen AI startups continue to seek larger partners to secure vital compute resources.
A similar move was made by Amazon, which made a US$5bn investment in Anthropic to provide access to its Trainium chips.
