SpaceX strikes $60 billion deal option for AI coding start-up Cursor

Elon Musk’s SpaceX has reached an agreement securing the right to acquire code-editing start-up Cursor for $60 billion as it seeks to strengthen its position in the global artificial intelligence race ahead of its planned initial public offering.

The company said the firms were working together “to create the world’s best coding and knowledge work AI”, adding that SpaceX had an option to buy Anysphere, Cursor’s parent company, for $60 billion later this year, according to the Financial Times.

Under the agreement, if SpaceX chooses not to proceed with the acquisition, it would still pay $10 billion “for our work together” — a figure that would rank among the largest termination fees in corporate history.

Cursor, founded in 2022, was valued at $29 billion in November and has been one of Silicon Valley’s fastest-growing start-ups, driven by strong demand for AI-assisted software development tools.

Musk is reportedly aiming to leverage Cursor’s customer base of software engineers and its expertise in AI coding systems to close the gap with rivals whose models have outpaced those developed by his xAI lab. He founded xAI in 2023 to compete with OpenAI and Anthropic, later merging it with SpaceX as part of a broader consolidation of his technology ventures.

Over the past year, Musk has accelerated deal-making across his business empire, integrating assets spanning space exploration, artificial intelligence, social media and infrastructure. In March last year, he merged his social media platform X with xAI in an all-stock deal, before rolling both into SpaceX in February in a transaction valuing the combined entity at $1.25tn.

The upcoming SpaceX IPO is expected to value the company at $1.75tn, potentially making it the largest public offering in history. However, analysts say the integration of multiple businesses has complicated valuation assessments.

According to a source familiar with the company’s finances, xAI recorded losses of $6.4 billion in 2025, compared with $1.56 billion in 2024, while SpaceX’s Starlink division posted an operating profit of $4.42 billion last year, up from $2 billion the previous year. Musk has proposed maintaining control over the entire group through special voting shares.

Cursor is expected to benefit from access to SpaceX’s computing infrastructure to further develop its coding model, Composer, which was launched late last year.

Oskar Schulz, president of Anysphere, said: “We think SpaceX is basically the best company in the world when it comes to building out compute. The feats they have been able to pull off are extraordinary.”

Musk has previously outlined ambitions to expand AI infrastructure into space, arguing that orbit-based data centres powered by solar energy could offer a cheaper and more efficient alternative to Earth-based systems.

Cursor’s annualised revenue recently surpassed $2 billion, reflecting rapid adoption of its tools designed to boost software engineering productivity. The company currently relies on AI models from OpenAI, Anthropic, xAI and Google to power its products.

However, rising competition has placed pressure on Cursor’s business, as leading AI firms rapidly release competing coding tools such as OpenAI’s Codex and Anthropic’s Claude Code.

Cursor has also been developing its own Composer model. Last month, it emerged that the latest version of Composer was built on top of an open-source model developed by Chinese start-up Moonshot AI.

By Sabina Mammadli