SpaceX announced on April 21 that it has secured the right to acquire AI coding startup Cursor for $60 billion later this year, or alternatively pay $10 billion for their joint collaboration on coding and knowledge work AI. The deal, reported by CNBC, represents the largest acquisition option in AI history and immediately positions SpaceX’s xAI division as a direct competitor to OpenAI’s Codex and Anthropic’s Claude Code.
“SpaceXAI and @cursor_ai are now working closely together to create the world’s best coding and knowledge work AI,” the company posted on X. Cursor CEO Michael Truell confirmed the partnership, writing that he was “excited to partner with the SpaceX team to scale up Composer,” referring to Cursor’s proprietary AI model.
The Deal Structure
The structure is a two-track arrangement, according to The Guardian. SpaceX pays $10 billion upfront for the partnership work. It then retains the option to acquire Cursor outright for $60 billion before year-end. The New York Times initially reported a straight $50 billion purchase price before updating its story to reflect SpaceX’s own disclosure of the option structure, according to CNBC.
Cursor, built by Anysphere, was simultaneously in talks to raise $2 billion at a valuation exceeding $50 billion, with Andreessen Horowitz co-leading and Nvidia and Thrive Capital expected to participate, CNBC confirmed.
Why Cursor Commands This Price
The valuation reflects Cursor’s growth trajectory. Founded in 2022 by four MIT students, the company went from a $400 million Series A in mid-2024 to a $29.3 billion Series D in November 2025, according to Forbes. It has surpassed $1 billion in annualized recurring revenue with year-over-year growth exceeding 9,900%. More than 1 million developers use the platform daily, generating 150 million lines of enterprise code per day, and it has embedded itself inside 67% of Fortune 500 companies.
Compute Meets Distribution
SpaceX absorbed xAI in an all-stock deal in February 2026 valued at approximately $1.25 trillion, inheriting the Colossus supercomputer in Memphis with the equivalent of 1 million Nvidia H100 GPUs. What it did not inherit was a competitive coding product. OpenAI’s Codex has reached 3 million weekly users. Anthropic’s Claude Code has become the most-used AI coding tool among professional engineers. xAI had no comparable offering.
“The combination of Cursor’s leading product and distribution to expert software engineers with SpaceX’s million H100 equivalent Colossus training supercomputer will allow us to build the world’s most useful models,” SpaceX stated.
Two Cursor product engineering leads, Andrew Milich and Jason Ginsberg, had already joined SpaceX in March, according to CNBC. Microsoft reportedly explored acquiring Cursor before xAI moved forward.
The IPO Angle
The announcement comes as SpaceX prepares for what analysts expect could be the largest IPO in history, with a potential listing as early as June 2026 targeting a valuation near $1.75 trillion and a $75 billion fundraise. At that scale, the $60 billion Cursor option represents less than 5% of SpaceX’s combined valuation, according to Forbes. The deal also lands less than a week before the Musk v. Altman trial begins, pitting SpaceX’s founder against the CEO of OpenAI, which was an early investor in Cursor.
The agentic coding market is now a three-way race between SpaceX/Cursor, OpenAI’s Codex, and Anthropic’s Claude Code. SpaceX just optioned the company with the largest developer distribution in the space. Whether it exercises that option will depend on what the partnership produces between now and the end of the year.