SpaceX partners with Cursor and may buy it for $60 billion

In short: SpaceX says it has a deal to work with Cursor on AI for coding and it has an option to buy Cursor for $60 billion later this year.

What happened

SpaceX announced a partnership with Cursor, a popular tool that helps software developers write and manage code. SpaceX said the two companies will build what it called a next generation “coding and knowledge work AI,” meaning software that can help with programming and other office tasks.

The agreement includes a major financial choice for SpaceX later this year. SpaceX said it will either pay Cursor $10 billion for the work, or it can acquire Cursor for $60 billion. An “option to buy” is like putting a price tag on something now, then deciding later whether to purchase it.

The deal follows other recent links between Elon Musk’s companies and Cursor. Reports said xAI, another Musk company, would rent computing power to Cursor so it can train its latest AI model. Training an AI model is like putting it through a very large study program, and it requires huge numbers of computer chips.

TechCrunch also noted Cursor has been rising quickly in valuation, from $2.5 billion in early 2025 to a reported $29.3 billion after a late 2025 funding round. A separate report said Cursor was discussing a new fundraising round at about a $50 billion valuation.

Why it matters

This shows how expensive and competitive AI tools for coding have become. It also suggests SpaceX may want tighter control over the software its engineers use, especially as Cursor relies on AI systems from other companies like OpenAI and Anthropic.

Source: TechCrunch AI