Elon Musk’s SpaceX has secured the option to buy AI coding startup Cursor for $60 million later this year.
The agreement was made public in a post on Musk’s X platform, which said the companies are “working closely together to create the world’s best coding and knowledge work AI.”
The partnership will pair Cursor’s code-writing software with SpaceX’s Colossus supercomputer in Memphis, Tenn., which reportedly contains the equivalent of a million Nvidia H100 GPUs.
As part of that arrangement, SpaceX will have the opportunity to acquire Cursor for $60 billion before the end of this year. Should it not do so, it will pay Cursor $10 billion for the work they have completed together — a huge termination fee for a few months of partnership.
Cursor was founded in 2022 and has since emerged as one of Silicon Valley’s fastest-growing startups, achieving a valuation of $29.3 billion following a $2.3 billion Series D funding round in November of last year.
While SpaceX was originally envisioned as a company that makes rockets and spacecraft, it has become increasingly involved in AI, as was illustrated by its $1.25 trillion merger with another of Musk’s companies, xAI, earlier this year.
With the firm now reported to be targeting an IPO, its ambitions appear to have evolved, with Musk apparently contemplating AI data centers in space following the success of the Starlink satellite program. “In the long term, space-based AI is obviously the only way to scale,” he told employees when the SpaceX/xAI merger went through.
How Cursor fits into this futuristic vision remains to be seen, but in the short term, the companies’ potential integration will be viewed as an attempt to bolster xAI’s ability to develop coding tools, given that the company has fallen well behind Claude Code and Codex in this area.
That certainly appears to be how Cursor is approaching the deal, with CEO and co-founder Michael Truell posting on X: “Excited to partner with the SpaceX team to scale up Composer [Cursor’s coding model]. A meaningful step on our path to build the best place to code with AI.”
A company blog post added more context, adding that attempts to advance its training efforts had been “bottlenecked by compute” and that leveraging Colossus would “dramatically scale up the intelligence of our models”.
SpaceX’s post was as notable for what it omitted as what it revealed. The company has not disclosed which metrics will be used to determine whether to proceed with a deal, how the deal would be paid for, or whether it would go through before or after the mooted IPO.
