SpaceX to acquire Cursor in $60B stock deal after IPO

Just days after its record-breaking IPO, SpaceX has announced a $60 billion all-stock acquisition of Cursor, the AI-powered coding startup. The deal comes fewer than two months after the two companies first signaled a partnership, marking a swift escalation in SpaceX’s ambitions to dominate artificial intelligence.

The acquisition is designed to supercharge SpaceX’s AI division, which was built around Elon Musk’s xAI after the two entities merged earlier this year. While AI capabilities were a cornerstone of SpaceX’s IPO pitch, the division has struggled with internal turmoil and public controversies, including permitting users to generate non-consensual deepfakes of women and children. SpaceX confirmed Tuesday that the transaction is expected to close by the third quarter of this year.

Prior to SpaceX’s approach, Cursor was on the verge of closing a $2 billion funding round from investors including Andreessen Horowitz, Thrive, and Nvidia, a deal that would have valued the startup at $50 billion, according to TechCrunch. In April, Musk’s company floated an unusual pre-IPO offer: either acquire Cursor for $60 billion in stock or pay a $10 billion breakup fee if the deal collapsed.

Cursor was experiencing explosive growth when the initial offer was made. However, one insider told TechCrunch at the time that the planned $2 billion raise would not be sufficient to reach profitability. This was despite the startup having already secured $900 million in a Series C round in June 2025 and an additional $2.3 billion later that same year.

Founded in 2022 under the name Anysphere, Cursor has enjoyed a meteoric rise as AI-assisted coding surged in popularity over the past two years. After participating in OpenAI’s startup accelerator in 2024, it raised enough capital to reach a valuation of roughly $29 billion before the SpaceX deal was announced.

Signs of SpaceX’s interest in Cursor surfaced earlier this year when xAI hired two of the startup’s senior engineering leaders. By April, Business Insider reported that xAI had begun leasing data center capacity to Cursor, a move reminiscent of the infrastructure deals SpaceX struck with Anthropic and Google ahead of its IPO. Those discussions quickly evolved into the acquisition now being finalized.

The timing of the deal coincided with the unraveling of xAI. All 11 of Musk’s co-founders in xAI had departed by the end of March, and Musk publicly acknowledged that the company “was not built right the first time around,” vowing to rebuild it from the ground up. This followed xAI’s Grok chatbot referring to itself as “MechaHitler” in 2025 and enabling users to generate explicit deepfakes of women and children earlier this year. SpaceX’s IPO filings warned investors that such behavior posed a risk to its business, and the company now faces multiple legal challenges stemming from these incidents.

The dismantling of xAI began as SpaceX prepared for what would become the largest IPO in history. During the roadshow, SpaceX and its bankers pitched investors on a total addressable market of roughly $28 trillion, with nearly all of that sum,$26 trillion,tied to the company’s AI ambitions. SpaceX projected a $2.4 trillion AI infrastructure business, including plans for a satellite constellation dedicated to AI compute, and a $22.7 trillion opportunity in enterprise applications.

Now, SpaceX is betting that Cursor can help deliver on those lofty promises. The post-IPO financial picture has made the acquisition even more appealing. Since going public last Friday, SpaceX’s stock has surged from an IPO price of $135 per share to over $200 in pre-market trading as of Tuesday morning. That rally has added nearly $1 trillion to the company’s market cap in just a few days, a sum equivalent to roughly 16 Cursor-sized acquisitions.