SpaceX is working with Cursor and has a $60B initial purchase option

SpaceX has announced that it has partnered with Cursor to create next-generation “coding and knowledge work AI,” which includes an incredible deal – an opportunity to buy the popular software development platform for $60 billion later this year.

The partnership and acquisition of a leader in the field of the hottest AI products can be seen in line with SpaceX’s highly anticipated results. Investors looking to capitalize on an IPO could see their partnership with Cursor as another way to profit from Elon Musk’s growing technology portfolio.

The deal will come as no surprise to those who follow the industry closely. Last week, it was reported that xAI will launch borrowing computer power from its data center to Cursor, and launch scripts using multiple xAI chips to train its latest AI model. And last month, two of Cursor’s senior engineering leaders, Andrew Milich and Jason Ginsberg, left the company to join xAIwhere both report directly to Musk.

SpaceX described the partnership as a project to combine “sales and distribution of Cursor software engineers” with SpaceX’s Colossus supercomputer, which the company says has the equivalent power of Nvidia H100 million chips.

SpaceX also said that at an unspecified time later this year, it will pay Cursor $10 billion for its work or take the company for $60 billion. Last week, TechCrunch report Cursor was eyeing a $50 billion valuation in an upcoming private equity auction. This number shows a remarkable leap. Cursor was valued at just $2.5 billion in January of last year, rose to $9 billion by last May, and was valued at $29.3 billion when it closed a $2.3 billion Series D round in November.

Any number would be a huge blow to SpaceX, which seems to be losing money after buying xAI and social network X and is planning to invest more. The summary did not say whether all the money could be paid in stockX.

At this point, the move can address weaknesses in any company, but it also exposes them. Neither Cursor nor proprietary xAI can match the leading offerings from Anthropic and OpenAI – the same companies that are now directly competing with Cursor in the development market.

Cursor still uses and resells access to the Claude and GPT models even though both companies have released their own recording equipment, a difficult plan for the new SpaceX partnership to escape.