SpaceX secures option to buy Cursor for $60 billion as Musk deepens push into AI coding tools

SpaceX said on Tuesday that Cursor has granted Elon Musk’s company the right to acquire the coding startup later this year for $60 billion, while also leaving open an alternative under which SpaceX would pay $10 billion for the companies’ joint work if no acquisition goes through. The arrangement immediately stood out because it links one of the fastest-rising names in AI coding software to a Musk company that is better known for rockets, satellites and launch services, but is now trying to build a larger position in the market for models used by engineers and other technical workers.

The structure described by SpaceX is unusual enough that it is already shaping the story almost as much as the headline valuation. Reuters, carried by Channel News Asia, reported that SpaceX framed the deal as a right to acquire Cursor later this year for $60 billion or to pay $10 billion for the work the two companies do together. The Verge and TechCrunch both described the same provision as highly unconventional even by the standards of large technology transactions, because the fallback payment is being presented less as a classic breakup fee than as compensation for collaboration on AI systems and infrastructure.SpaceX cuts a deal to maybe buy Cursor for $60 billiontheverge.com·SecondaryWith an IPO looming for Elon Musk’s SpaceX / xAI / X combo platter of companies, SpaceX has announced an odd arrangement to either acquire the automated programming platform Cursor for $60 billion or pay a fee of $10 billion. The New York Times first reported a possible deal, and SpaceX confirmed it in a tweet. SpaceX and Cursor are now working closely together to create the world’s best coding and knowledge work AI.

That matters because Cursor is not a marginal toolmaker in this market. The company has become one of the best-known coding platforms of the current generative-AI cycle, competing for developers at a moment when OpenAI and Anthropic are also pushing harder into code-generation products. In the telling from SpaceX and the outlets that reviewed the announcement, the attraction lies in combining Cursor’s product reach among software engineers with access to very large pools of compute and model-building infrastructure inside Musk’s orbit.

SpaceX said the partnership would join Cursor’s product and distribution among expert software engineers with SpaceX’s Colossus supercomputer, which the company said has compute equivalent to one million Nvidia H100 chips. That claim is a central part of the strategic pitch. It suggests that SpaceX is not presenting this as a simple financial investment or a vanity acquisition, but as an attempt to tie a popular application layer directly to a massive training and inference stack that Musk’s companies increasingly market as their comparative advantage.SpaceX cuts a deal to maybe buy Cursor for $60 billiontheverge.com·SecondaryWith an IPO looming for Elon Musk’s SpaceX / xAI / X combo platter of companies, SpaceX has announced an odd arrangement to either acquire the automated programming platform Cursor for $60 billion or pay a fee of $10 billion. The New York Times first reported a possible deal, and SpaceX confirmed it in a tweet. SpaceX and Cursor are now working closely together to create the world’s best coding and knowledge work AI.

The timing is also important. The Verge reported that the New York Times first reported the possible deal and noted that a broader SpaceX, xAI and X combination is looming in market conversations around an eventual public offering. TechCrunch, meanwhile, framed the Cursor arrangement in the context of a much-anticipated SpaceX IPO and argued that investors are likely to read the move as another attempt to attach a high-growth AI narrative to Musk’s wider set of companies. That does not prove an IPO link, but it does explain why markets and rival AI firms will read this announcement as more than a narrow product partnership.SpaceX cuts a deal to maybe buy Cursor for $60 billiontheverge.com·SecondaryWith an IPO looming for Elon Musk’s SpaceX / xAI / X combo platter of companies, SpaceX has announced an odd arrangement to either acquire the automated programming platform Cursor for $60 billion or pay a fee of $10 billion. The New York Times first reported a possible deal, and SpaceX confirmed it in a tweet. SpaceX and Cursor are now working closely together to create the world’s best coding and knowledge work AI.

Recent personnel and infrastructure shifts had already pointed in this direction. TechCrunch reported that xAI was expected to rent computing power from its data centers to Cursor and said two senior Cursor engineering leaders, Andrew Milich and Jason Ginsberg, had recently left to join xAI and report directly to Musk.Spacex says it has option to acquire startup Cursor for $60 billioni-invdn-com.investing.com·Secondary Taken together with Tuesday’s announcement, those details make the new arrangement look less like a sudden one-off deal and more like the latest step in a broader effort to pull AI talent, compute and distribution into the same corporate sphere.Spacex says it has option to acquire startup Cursor for $60 billioni-invdn-com.investing.com·Secondary

The valuation markers around Cursor help explain why the announcement landed so forcefully. Reuters said the option price would be $60 billion and the collaboration payment $10 billion. The Verge said Cursor was reportedly in the process of raising $2 billion at a $50 billion valuation. TechCrunch added more detail, saying the company had been valued at $2.5 billion in January of last year, around $9 billion by last May, and $29.3 billion post-money when it closed a $2.3 billion Series D in November. Even allowing for the feverish pricing that has marked the AI sector, the suggested acquisition figure would place Cursor among the most expensive software bets of the cycle.SpaceX cuts a deal to maybe buy Cursor for $60 billiontheverge.com·SecondaryWith an IPO looming for Elon Musk’s SpaceX / xAI / X combo platter of companies, SpaceX has announced an odd arrangement to either acquire the automated programming platform Cursor for $60 billion or pay a fee of $10 billion. The New York Times first reported a possible deal, and SpaceX confirmed it in a tweet. SpaceX and Cursor are now working closely together to create the world’s best coding and knowledge work AI.

For Musk, the industrial logic is clear enough even if the financial logic is still disputed. Cursor gives direct access to developers, workflows and subscription relationships in one of the hottest corners of enterprise AI. SpaceX and xAI bring scale, capital intensity and the promise of dedicated compute that could help reduce dependence on outside model providers over time. Supporters of the move will say it is a rational vertical play: own the chips or the compute, own the models, and then own the interface through which engineers actually use them.SpaceX cuts a deal to maybe buy Cursor for $60 billiontheverge.com·SecondaryWith an IPO looming for Elon Musk’s SpaceX / xAI / X combo platter of companies, SpaceX has announced an odd arrangement to either acquire the automated programming platform Cursor for $60 billion or pay a fee of $10 billion. The New York Times first reported a possible deal, and SpaceX confirmed it in a tweet. SpaceX and Cursor are now working closely together to create the world’s best coding and knowledge work AI.

Skeptics, however, have plenty of room to push back. TechCrunch argued that neither Cursor nor xAI currently has proprietary models that clearly match the strongest offerings from Anthropic and OpenAI, while noting that Cursor still sells access to Claude and GPT models even as those same companies compete for the developer market themselves.Spacex says it has option to acquire startup Cursor for $60 billioni-invdn-com.investing.com·Secondary In that reading, the proposed tie-up is also an admission that Musk’s AI companies still need stronger software distribution and more durable product differentiation if they want to challenge the leading incumbents on their own terms.Spacex says it has option to acquire startup Cursor for $60 billioni-invdn-com.investing.com·Secondary

There is also a more conservative business argument against getting carried away. A $60 billion option figure is not the same thing as a completed acquisition, and the fallback payment of $10 billion underscores that the arrangement still leaves room for multiple outcomes. Until there is clarity on whether SpaceX actually exercises the option, how any payment would be financed, and whether regulators or investors would bless a tighter merger of Musk-linked assets, the announcement remains best understood as a strategic declaration rather than a finished transaction.

Still, the declaration is meaningful in its own right. It shows that the battle for AI coding tools is no longer confined to the traditional software groups or the largest model labs. SpaceX is signaling that developer software, compute capacity and a broader Musk ecosystem may increasingly be treated as one competitive project. Whether that produces a full acquisition or merely a very expensive collaboration, Tuesday’s announcement suggests the next phase of the AI race will be fought not only over better models, but over who controls the pipes, the product and the engineers using both.