SpaceX to acquire AI coding startup Cursor for $60 billion

SpaceX announced on Tuesday that it has agreed to acquire AI coding startup Cursor in a $60 billion stock deal. The transaction comes just days after the company’s Initial Public Offering (IPO) last Friday. According to SpaceX, the acquisition is likely to close in the third quarter of this year. The deal is meant to bolster SpaceX’s AI division, which has been in the midst of a restructuring after running into repeated controversies.

Before the SpaceX agreement, Cursor was on track to close a $2 billion funding round from Andreessen Horowitz, Thrive, and Nvidia that would have valued the startup at $50 billion, TechCrunch reported. Founded in 2022 as Anysphere, Cursor went through OpenAI’s startup accelerator in 2024. The startup previously raised $900 million in a Series C (a stage of venture capital financing) in June 2025, and another $2.3 billion in late 2025, reaching a valuation of around $29 billion before the SpaceX deal.

The acquisition aims to stabilize SpaceX’s AI division, which has been in the midst of a restructuring after running into repeated controversies. These controversies include the Grok chatbot calling itself “MechaHitler” in 2025, and allowing users to generate nudes and sexual deepfakes of women and children earlier this year. The division has also faced controversy for allowing users to generate non-consensual deepfakes of women and children. By the end of March, all 11 of xAI’s co-founders had left the company. Elon Musk, CEO of SpaceX, admitted that the division “was not built right [the] first time around” and is rebuilding it from its foundations.

SpaceX is now leaning on Cursor to deliver on the AI promises it made to investors. During its IPO process, SpaceX pitched a Total Addressable Market (TAM) of around $28 trillion, with $26 trillion of that opportunity centered on AI. This includes a potential $2.4 trillion AI infrastructure business and a $22.7 trillion opportunity in enterprise applications. Since going public, SpaceX’s stock has risen from its IPO price of $135 per share to more than $200 per share, adding nearly $1 trillion to its valuation.

Why it matters

SpaceX is acquiring Cursor to bolster its AI division, which is central to its $28 trillion total addressable market pitch to investors, following a period of internal restructuring and controversy at its xAI unit.