SpaceX is buying AI coding startup Cursor for $60 billion just days after a massive IPO

Under the terms of the merger agreement, each share of Cursor's common and preferred stock will convert into SpaceX Class A common stock, with the exchange ratio determined by the volume-weighted average closing price of SpaceX stock over the seven trading days immediately before the deal closes, the company said. SpaceX expects the transaction to close during the third quarter of 2026, pending regulatory approvals.

SpaceX announced an option to acquire Cursor for $60 billion earlier this year, alongside an alternative arrangement under which SpaceX would pay $10 billion for collaborative work if it chose not to exercise the purchase option. Monday's filing confirms SpaceX has moved to complete the outright acquisition.

At the time SpaceX announced the option, Cursor was in the middle of raising a $2 billion funding round that would have valued the company above $50 billion, with Andreessen Horowitz, Nvidia $NVDA, and Thrive Capital set to participate. The $60 billion deal price exceeded that figure. Cursor's most recent funding round — a $2.3 billion Series D closed in November — had pegged its valuation at $29.3 billion, up from $2.5 billion at the start of 2025.

Microsoft $MSFT had examined a potential acquisition of Cursor before the SpaceX arrangement emerged, according to CNBC, but ultimately decided against submitting a formal bid. Cursor had also rebuffed two separate approaches from OpenAI, with the startup's leadership having prioritized remaining independent.

The partnership between SpaceX and Cursor had been taking shape in the weeks before the option was announced. Cursor had drawn on tens of thousands of xAI chips to train its newest model, and two senior Cursor engineers departed to take roles at xAI. Earlier this year, SpaceX folded xAI — Elon Musk's AI venture — into its operations.