SpaceX locks in $60 billion Cursor deal to close gap with rivals in AI coding race

Elon Musk’s SpaceX is buying the startup behind the popular AI coding agent Cursor, Anysphere, for $60 billion in an all-stock deal to boost its presence in the lucrative enterprise AI tools market.

Tuesday’s deal follows a blockbuster Nasdaq ​debut for the rockets-to-AI company last week, in which its valuation surged to more than $2 trillion.

The acquisition will give xAI, which was acquired ‌by SpaceX in February, a stronger hold in AI coding, one of the first areas where companies have turned AI into a real source of revenue from businesses.

Capitalizing on that interest is crucial for SpaceX as it had pitched its IPO investors an addressable market worth $28.5 trillion, the theoretical maximum revenue it could capture, of which a big share is expected to come from ​AI for businesses.

Cursor is one of several Silicon Valley startups that have drawn waves of developers by using AI to automate coding, making it ​a key rival to market leaders Anthropic and OpenAI. But a lack of access to computing power has hampered Cursor’s growth.

“Cursor ⁠does not have the scale of OpenAI or Anthropic, but it has built some very impressive coding models relative to cost. That makes this a positive move ​for SpaceX,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

SpaceX had been eyeing Cursor for months and had in April unveiled an option to either buy ​the startup for $60 billion later this year or pay $10 billion for a partnership.

In its IPO filing, the company had said Cursor’s access to developers’ data, including coding requests and design decisions, could help improve its AI models such as Grok.

SpaceX said on Tuesday it would soon release an AI model on Cursor as well as Grok Build, xAI’s coding agent, which it has ​been jointly training for several months.

The all-stock transaction, for which SpaceX will not use proceeds from its IPO, is expected to close in the third quarter of ​2026.

Its shares jumped 10% in early trading, putting the company on track to add about $247 billion to its market capitalization of $2.53 trillion. At $211.27, the stock has climbed more than 56% ‌from its ⁠IPO price of $135.

If the gains hold, SpaceX is set to overtake Amazon in market value to become the fifth-largest company.

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Paying in stock, experts said, lets SpaceX take advantage of its towering valuation, which would mean giving up a relatively small slice of equity for a $60 billion deal.

“One of the things that makes SpaceX so valuable is how valuable it is. The Cursor acquisition costs materially less in dilution because of SpaceX’s high valuation,” billionaire Bill Ackman said in a post on ​X.

Cursor’s business has scaled rapidly since its ​founding in 2022, with roughly $2.6 billion ⁠in annualized business-to-business revenue and enterprise sales growing sharply, according to company data shared with Reuters earlier this month.

The San Francisco-based company, backed by prominent Silicon Valley venture capitalists such as Andreessen Horowitz and Thrive, as well as Nvidia and Alphabet’s ​Google, had reportedly been in talks for a funding round valuing it at $50 billion.