What to know about Cursor, the AI coding startup SpaceX is buying for $60 billion

By William Gavin

Newly public SpaceX is taking advantage of a previous agreement that gave it the option to acquire Cursor, whose engineers have already been working closely with the company

SpaceX is buying an artificial-intelligence startup as it works to advance the Grok family of large language models.

SpaceX is buying a highflying, fast-growing artificial-intelligence startup as it seeks to make its Grok model more competitive.

On Tuesday, as SpaceX's stock (SPCX) boomed, the company said it would acquire the parent company of the AI coding startup Cursor for $60 billion. The transaction is expected to close by the end of August, according to the companies.

The deal gives Cursor access to SpaceX's Colossus data centers, removing a bottleneck preventing the startup from quickly improving its models. In return, SpaceX gets a partner with experienced staff, plenty of training data and products that appeal to enterprise customers.

Cursor is best known for spurring the rise of "vibe coding," and it recently topped $4 billion in annualized revenue, according to Forbes. It makes a tool that allows developers to switch between multiple AI models and has also made its own coding models. The company was most recently valued at $29.3 billion.

The acquisition adds to SpaceX's efforts to restructure its AI business, formerly known as xAI. CEO Elon Musk recently said xAI "was not built right the first time around." The company's AI models are relatively unpopular with U.S. businesses, according to Ramp data, and just a fifth of its monthly active users had used AI features as of March 31, according to the company.

Cursor employees have been reportedly working in xAI's offices for weeks, with some limitations due to potential antitrust concerns. In a statement, SpaceX said it has been training a model with Cursor that will be released "soon."

"AI will achieve Stockfish-level coding and generalized computer use," Musk said in a statement on social media, possibly referring to the free, open-source chess engine.

The parties floated a potential deal in April. SpaceX previously said it would pay Cursor $10 billion for their work together if it decided not to acquire the startup. If the deal falls through due to antitrust issues, SpaceX is on the hook for a $4 billion termination fee, according to a regulatory filing.

Read more: What is Cursor? SpaceX could buy the AI company for a whopping $60 billion.

-William Gavin

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06-16-26 1058ET