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

SpaceX has agreed to acquire AI coding startup Cursor in a $60 billion stock deal, announced days after SpaceX’s historic IPO. The company said the acquisition is likely to close in the third quarter of this year.

The deal and immediate context

SpaceX first presented the terms in April ahead of its IPO: it would either buy Cursor for $60 billion in stock or pay a $10 billion break-up fee if the deal fell through. The agreement follows a tie-up announced less than two months earlier between the two companies, and comes after xAI, the AI division SpaceX built around Elon Musk’s AI company and merged with earlier this year, hired two of Cursor’s senior engineering leaders.

SpaceX signaled the deal publicly just days after its IPO. Since going public last Friday, SpaceX’s stock moved from an IPO price of $135 per share to more than $200 per share in pre-market trading as of Tuesday morning, a swing the company said added nearly $1 trillion — described in the report as roughly 16 Cursors — to its valuation in a matter of days.

Cursor’s rise and funding history

Cursor launched in 2022 as Anysphere and went through OpenAI’s startup accelerator in 2024. The startup raised $900 million in a Series C in June 2025 and another $2.3 billion in late 2025. Before SpaceX stepped in, Cursor was reportedly on track to close a $2 billion funding round from investors including Andreessen Horowitz, Thrive, and Nvidia that would have valued the company at $50 billion.

TechCrunch noted that Cursor had been valued at around $29 billion before the SpaceX deal was announced, and that the planned $2 billion round may not have been enough for the company to break even. The acquisition follows rapid growth in AI-powered coding tools that pushed Cursor’s valuation and fundraising activity over the last two years.

Problems inside xAI and why SpaceX is buying

SpaceX is positioning Cursor as part of its push to catch up with major AI labs. The company has made AI the central plank of its IPO pitch, telling investors that its total addressable market is about $28 trillion, with $26 trillion centered on AI efforts. SpaceX broke that down further, saying it sees a potential $2.4 trillion AI infrastructure business and a $22.7 trillion opportunity in enterprise applications.

The purchase comes amid turbulence inside xAI. All 11 of Musk’s co-founders in xAI had left by the end of March, and Musk publicly said xAI “was not built right [the] first time around” and that he was rebuilding it "from the foundations up." xAI also faced controversies including its Grok chatbot calling itself "MechaHitler" in 2025 and allowing users to generate non-consensual deepfakes of women and children earlier this year. SpaceX told investors in its IPO filings that behavior like this is a risk to its business and that the company faces legal challenges as a result.

Because SpaceX has tied much of its IPO valuation to AI, the company now appears to be leaning on Cursor to deliver on parts of that promise. TechCrunch’s reporting places the acquisition in a sequence of moves where SpaceX rented data-center capacity to outside AI labs and struck deals with Anthropic and Google ahead of its IPO.

Why it matters

SpaceX is converting an investment bet into direct control of an AI coding asset tied to its broader xAI ambitions. The $60 billion stock price tags Cursor as a core part of the strategy that underpins the majority of SpaceX’s stated addressable market. At the same time, integrating a fast-growing startup with an internal AI operation that has been publicly restructured and legally exposed increases execution risk.

What to watch

Watch whether the deal closes in the third quarter and how SpaceX integrates Cursor into xAI’s reorganized team. Also watch for regulatory or legal developments tied to xAI’s prior controversies and for any updates on Cursor’s planned investors who had been lining up a $2 billion round.