A new agreement between SpaceX and AI coding startup Cursor gives SpaceX the right to either buy the company outright for $60 billion or pay $10 billion for collaborative work — both options available at some point later this year, SpaceX announced.
"SpaceXAI and @cursor_ai are now working closely together to create the world's best coding and knowledge work AI," SpaceX said in a post on X $TWTR. The partnership combines Cursor's product and distribution to software engineers with SpaceX's Colossus supercomputer, which SpaceX says has the equivalent compute power of a million Nvidia $NVDA H100 chips.
In a post on X, Cursor CEO Michael Truell expressed enthusiasm for the collaboration, writing that it marks "a meaningful step on our path to build the best place to code with AI" and that he looks forward to working with SpaceX to scale up Composer, the company's AI model.
The timing of SpaceX's announcement was notable: according to CNBC, it preceded by only minutes a New York Times report — sourced to two unnamed individuals with knowledge of the matter — placing the acquisition price at $50 billion, a figure the Times revised once SpaceX's own statement was public.
Groundwork for the deal had been laid in recent weeks, TechCrunch reported: Cursor had already been drawing on tens of thousands of xAI chips to train its newest model, with xAI supplying that compute capacity from its own data centers. Around the same time, senior Cursor engineers Andrew Milich and Jason Ginsberg departed to take roles at xAI, both now reporting directly to Elon Musk.
The startup's product suite gives software developers ways to capture their work through videos, logs, and screenshots, as well as test the changes they make to code. A $2.3 billion Series D round closed in November put Cursor's post-money valuation at $29.3 billion — a remarkable ascent from $2.5 billion at the start of 2025 and $9 billion just four months later, according to TechCrunch. Separately, CNBC reported that Cursor had been negotiating a fresh $2 billion fundraise that would peg its valuation above $50 billion, with Andreessen Horowitz penciled in as a co-lead and both Nvidia and Thrive Capital anticipated to join the round.
Neither SpaceX nor Cursor responded to requests for comment.