SpaceX cuts a deal to maybe buy Cursor for $60 billion

With an IPO looming for Elon Musk’s SpaceX / xAI / X combo platter of companies, SpaceX has announced an odd arrangement to either acquire the automated programming platform Cursor for $60 billion or pay a fee of $10 billion. Buying this startup that’s focused on AI coding could help xAI’s tools compete with market leader Anthropic, as well as the other competitors. A report by The Information this week said Sergey Brin has directed Google’s “strike team” to help its agentic AI tools catch up, while Sam Altman reportedly declared a “code red” at OpenAI last year before shutting down Sora to focus on the ChatGPT superapp and its own Codex tool.

The New York Times first reported a possible deal Tuesday evening, and SpaceX confirmed it in a tweet.

SpaceX:

SpaceX and Cursor are now working closely together to create the world’s best coding and knowledge work AI.

The combination of Cursor’s leading product and distribution to expert software engineers with SpaceX’s million H100 equivalent Colossus training supercomputer will allow us to build the world’s most useful models.

Cursor has also given SpaceX the right to acquire Cursor later this year for $60 billion or pay $10 billion for our work together.

Breakup fees aren’t unusual for a proposed acquisition, but pitching this as “$10 billion for our work together” on AI is. CNBC and Bloomberg have reported that Musk values his combined X companies at $1.25 trillion, and CNBC reported a few days ago that Cursor was in the process of raising $2 billion in funding at a valuation of $50 billion.