SpaceX to Acquire AI Coding Startup Cursor for $60 Billion in Stock

SpaceX has agreed to acquire AI coding startup Cursor in a $60 billion stock deal, just a few days after the space company’s historic IPO and less than two months after announcing a tie-up between the two.

The deal is meant to help SpaceX’s AI division — built around Elon Musk’s AI company xAI, which SpaceX merged with earlier this year — catch up to the major AI labs. Despite being a centerpiece of its IPO promises, SpaceX’s AI division has been in the midst of a restructuring after running into repeated controversies, like allowing users to generate non-consensual deepfakes of women and children.

SpaceX told investors during the IPO process that it sees an addressable market for AI products worth $26 trillion, roughly equivalent to U.S. GDP. SpaceX said Tuesday that the acquisition is likely to close in the third quarter of this year.

Before SpaceX came knocking, Cursor was on track to close a $2 billion funding round from the likes of Andreessen Horowitz, Thrive, and Nvidia that would have valued the AI coding startup at $50 billion, TechCrunch has reported.

Musk’s company announced a curious deal in April ahead of its IPO: it would either buy Cursor for $60 billion in stock, or pay a $10 billion break-up fee if the deal fell through.

This story is developing. Check back for updates.