SpaceX Moves to Acquire Cursor Parent for $60 Billion After IPO

SpaceX announced Tuesday it will buy AI coding startup Cursor for 60 billion dollars in stock, completing a deal first outlined months earlier. The move comes less than a week after the rocket company went public in what became the largest IPO in history, raising 85 billion dollars and reaching a valuation of 2.5 trillion dollars.

The acquisition targets Cursor's tools that help developers write code faster using artificial intelligence. Cursor, originally founded as Anysphere in 2022, has scaled quickly with roughly 2.6 billion dollars in annualized business revenue and strong enterprise sales. SpaceX had secured an option in April to purchase the firm outright or pay a 10 billion dollar fee if the deal fell through. Tuesday's filing confirms the company is exercising the purchase option, with the transaction expected to close in the third quarter pending approvals.

SpaceX merged its operations with Elon Musk's xAI earlier this year and has positioned the combined effort as a direct competitor to OpenAI and Anthropic. Company statements during the IPO highlighted an addressable AI market estimated at 26 trillion dollars. Acquiring Cursor gives the firm additional computing resources and engineering talent to improve coding products that Musk has publicly noted lag behind rivals such as Claude Code and Codex.

Cursor was preparing a 2 billion dollar funding round valuing it near 50 billion dollars before SpaceX exercised its option. Investors including Andreessen Horowitz, Nvidia, and Thrive Capital had been lined up for that round. Earlier funding included a 2.3 billion dollar Series D in late 2025 at a 29.3 billion dollar valuation. Microsoft reviewed a possible purchase but passed, and OpenAI made two separate approaches that Cursor declined.

The deal supplies Cursor with greater data center capacity while folding its technology into SpaceX's broader push into enterprise AI services. Two Cursor engineering leaders had already moved to SpaceX projects focused on lunar development and xAI work. The acquisition avoids the 10 billion dollar breakup payment and locks in the higher valuation for Cursor shareholders through an all-stock exchange tied to SpaceX's recent trading price.

SpaceX's public debut and this follow-on purchase underscore the company's rapid expansion beyond rockets into software and artificial intelligence. The transaction reflects continued investor appetite for companies delivering practical AI applications amid intense competition among the largest tech players.