SpaceX Acquires AI Coding Assistant Cursor for $60 Billion

Silicon Valley-based artificial intelligence (AI) coding assistant Cursor, cofounded by 25-year-old Indian-origin entrepreneur Aman Sanger alongside three other Massachusetts Institute of Technology graduates, shot into the spotlight on Tuesday after Elon Musk-led SpaceX announced its acquisition in a $60 billion all-stock deal. The transaction is among the largest acquisitions ever of a VC-backed startup globally.

Cursor currently has $2.6 billion in annualised business-to-business revenue, making it one of the fastest-growing AI software startups. The company has so far raised $3.3 billion in funding from Nvidia, Google, Accel, Thrive Capital and Andreessen Horowitz across multiple rounds.

Last November, the four cofounders, including Michael Truell (CEO), Sualeh Asif and Arvid Lunnemark, became self-made billionaires after their parent company, Anysphere, achieved a valuation of nearly $30 billion following a $2.3 billion funding round. Each founder held a 4.5% stake in the company, which was reportedly worth at least $1.3 billion. Lunnemark left the company last year.

Deedy Das, a partner at Silicon Valley venture capital fund, said on microblogging platform X, “What a brilliant $60B exit for Cursor to SpaceX today! $4B in run rate growing 7x YoY. The 4 25yr MIT founders will make ~$2.7B in a span 4yrs and first 50 hires ~$20-500M each. A testament to why you should actually join early stage startups and of huge outcomes building apps on top of AI models.”

The deal strengthens SpaceX’s AI ambitions and gives it a strong foothold in the AI coding tools segment, where rivals such as OpenAI and Anthropic have gained traction.

This follows the acquisition of AI coding platform Windsurf by Cognition, the maker of AI coding agent Devin, after its deal with OpenAI fell through in July 2025. Google acqui-hired Windsurf cofounder Varun Mohan through a licensing deal with the firm.

In earlier interactions with ET, investors and founders said the first-mover advantage enjoyed by AI startups is increasingly coming under pressure from leading firms such as OpenAI, Anthropic and Google.

They said that as the cost of developing frontier AI models and infrastructure continues to rise, access to capital, computing power and proprietary models are likely to determine competitive advantage in the AI era.

Earlier, in an interview to ET in November 2025, Sanger said that India remained Cursor’s second or third-largest market. “A big push for us is we want to be used by the world's biggest and best enterprises, in addition to developers across the world. So, we probably are doing a push into Indian enterprises as well,” he said

Sanger grew up in the US, where his father, Arvind Sanger, relocated 40 years ago after graduating from IIT Bombay.

Cursor has about one million daily users and 360,000 paid subscribers, according to reports.

The company counts British Airways, BP, Nokia and Sanofi among its clients. It competes with products such as Microsoft-owned GitHub Copilot and offerings from OpenAI and Google, positioning itself as a “model-agnostic” platform that lets customers choose among different AI systems.

Founded in 2022, Cursor, which started as a training-model startup focused on mechanical engineering, eventually evolved into a developer tool.

“If you've used CAD (computer-aided design) software like SolidWorks, you kind of place these objects and design these 3D bodies and volumes that get turned into actual manufactured things in the real world. We trained models to do the copilot-style autocomplete before that,” cofounder Sanger had told ET.

He said the business proposition did not work because of a lack of data. The company subsequently shifted its focus to coding, aiming to create a platform that could reimagine programming as AI models began getting significantly better at writing code in early 2022.

The acquisition announcement comes days after in an interview to ET, which valued the company at more than $2 trillion. “The Company currently expects the merger to close during the third quarter of 2026,” SpaceX said in a filing with the US Securities and Exchange Commission.

The buyout follows months-long courtship between the two companies. In April, SpaceX secured an option to either acquire Cursor for $60 billion or pursue a strategic partnership for $10 billion. The companies began collaborating on AI initiatives in May.

The deal is expected to accelerate development of Cursor's AI models by providing access to SpaceX's large computing infrastructure. It also comes against the backdrop of two of Cursor's product engineering leaders joining SpaceX earlier this year.

This underscores Musk's efforts to build a vertically integrated AI ecosystem spanning data centres, foundation models and enterprise software, as competition intensifies across the generative AI industry.

SpaceX stock jumped 14% in early trading to $222.33 apiece on the US exchanges after the acquisition announcement on Tuesday.

(Catch all the Technology News News, and Latest News Updates on The Economic Times.)