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Elon Musk’s SpaceX is acquiring the startup behind the popular AI coding assistant Cursor in a $60 billion all-stock deal to strengthen its position in the profitable enterprise AI tools market.
Founded by Pakistan-born Sualeh Asif, Anysphere—Cursor’s parent company—had its blockbuster Nasdaq debut last week, catapulting its valuation to over $2 trillion. This acquisition will bolster xAI, which SpaceX acquired in February, particularly in AI coding—a sector where businesses are increasingly turning AI into a significant revenue stream.
Capitalizing on this growing interest is vital for SpaceX, as it has projected a potential market worth $28.5 trillion—its maximum theoretical revenue—much of which is expected to come from AI solutions for the enterprise sector.
SpaceX announced that it has exercised the option to acquire Cursor through an all-stock transaction, aiming to develop some of the world’s most useful AI models. For the past few months, SpaceX AI has been collaboratively training a model with Cursor, set to be released soon on Cursor and Grok Build.
Cursor stands out among Silicon Valley startups for using AI to automate coding, positioning itself as a rival to market leaders like Anthropic and OpenAI. However, limited access to computing resources has slowed its growth.
“Cursor doesn’t yet match the scale of OpenAI or Anthropic, but it has developed impressive coding models relative to its costs. This makes the move beneficial for SpaceX,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
SpaceX had been eyeing Cursor for months, offering either to buy the startup for $60 billion later this year or to form a partnership for $10 billion this past April. Its IPO filing highlighted how access to developer-generated data—such as coding requests and design choices—could help improve AI models like Grok.
The company plans to launch an AI model based on Cursor, along with Grok Build, its coding agent, both of which have been in joint training for several months. The transaction is expected to close in the third quarter of 2026, with no proceeds from the IPO used for the deal.
Following the announcement, SpaceX shares jumped 10% in early trading, boosting its market cap by approximately $247 billion to around $2.78 trillion. The stock has increased over 56% from its IPO price of $135, now trading at approximately $211.27. If these gains hold, SpaceX could surpass Amazon in market value, becoming the fifth-largest company in the US.
Experts noted that paying in stock allows SpaceX to leverage its high valuation, which minimizes dilution costs in the $60 billion deal. Billionaire Bill Ackman pointed out that this high valuation means SpaceX gives up a relatively small share of equity for such an acquisition.
Since its founding in 2022, Cursor has grown rapidly, generating about $2.6 billion in annualized revenue, with enterprise sales increasing sharply. The San Francisco-based startup has backing from top Silicon Valley investors like Andreessen Horowitz and Thrive, as well as Nvidia and Google.
The deal includes a $10 billion termination fee if it falls through under certain circumstances, with only a $4 billion fee if it’s blocked by antitrust concerns. It remains unclear if the deal will impact SpaceX’s existing agreements to lease data center capacity, which include deals with both Anthropic and Google totaling around $26 billion annually, with clauses allowing quick termination if needed.
Analyst Gil Luria from DS Davidson suggested that if usage of Grok and Cursor grows enough, SpaceX could revert to using their capacity internally, although current arrangements indicate they will continue to provide capacity to partners like Anthropic and Google for the foreseeable future.
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