SpaceX has entered into an agreement with AI company Cursor that gives the space company the option to fully acquire the startup later this year. According to SpaceX, it can choose between an acquisition valued at approximately $60 billion or a payment of $10 billion for joint development activities.
SpaceX shared the news itself via a post on X, in which the company states that its AI division is working closely with Cursor. SpaceX further states that the collaboration is focused on building a leading AI system for programming and other knowledge-intensive tasks. The wording amounts to an ambition to set the global standard for AI-assisted software development, the company said on X.
The announcement followed shortly after a report by The New York Times, which initially mentioned a direct acquisition for $50 billion. That report was later revised after SpaceX itself disclosed the details of the deal.
Cursor also responded. CEO Michael Truell stated via X that he looks forward to closer collaboration with SpaceX. He emphasized that the partnership should, among other things, contribute to scaling up Composer, Cursor’s AI model. According to Truell, this is an important step toward creating an optimal development environment centered on AI.
According to CNBC, the deal fits into a broader strategy by Elon Musk, who merged SpaceX with his AI company xAI earlier this year. Musk valued that merger at $1.25 trillion, and it is expected to form the basis for a future IPO. With this move, Musk appears to be seeking to further strengthen his position in the AI market.
New funding round aims to accelerate Cursor’s growth
Cursor itself is growing rapidly and, according to recent reports, is in the midst of a new funding round of approximately $2 billion, at a valuation of over $50 billion. Among the prospective investors are firms such as Andreessen Horowitz and Nvidia, which were previously involved with xAI.
Cursor’s technology focuses on supporting software developers, including by testing code and capturing development processes through various forms of logging and visual documentation. With this collaboration, xAI is attempting to gain ground on competitors such as OpenAI and Anthropic, both of which have already established strong positions with programming support tools.
It is notable that the announcement comes ahead of a legal battle between Musk and Sam Altman, in which the role of AI investments and competition is also central. Cursor previously played a role in this arena, as OpenAI was an early investor in the company.
For now, neither SpaceX nor Cursor has provided further clarification beyond their posts on X. The coming months will reveal whether SpaceX actually opts for a full acquisition or continues the partnership in a different form.