SpaceX secures option to buy AI startup Cursor for $60bn or partner for $10bn

SpaceX said it has secured an option to either acquire code-generation startup Cursor for $60bn later this year, or pay $10bn for their new partnership, as it pushes deeper into the lucrative market for AI developer tools.Along with OpenAI and Anthropic, Cursor is one of several Silicon Valley startups that has drawn waves of developers by using artificial intelligence to automate coding, a business where AI companies have found early commercial traction.The deal could give xAI, the Grok chatbot maker that SpaceX merged with in February, a stronger foothold in the AI coding market where it has so far lagged rivals. It also provides Cursor with more computing capacity to develop AI models.“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,” SpaceX said in a social media post on Tuesday.Colossus is xAI’s supercomputer cluster in Memphis, which it has touted as the largest in the world. The company has been spending billions of dollars on AI infrastructure.The announcement comes ahead of SpaceX’s highly anticipated public debut in the coming months, with the company eyeing a valuation of close to $1.75tn and a $75bn fundraise that could go down as the biggest IPO in history.Two product engineering heads at Cursor, a startup that sells AI models for coding tasks, said in March they joined SpaceX to contribute to the company’s lunar projects and xAI, Musk’s AI startup that is now part of SpaceX.Musk welcomed the engineers, Andrew Milich and Jason Ginsberg, saying, “Orbital space centers and mass drivers on the Moon will be incredible.”