SpaceX to Buy Cursor for $60B in Stock Days After Blockbuster IPO

SpaceX has finalized a $60 billion stock acquisition of AI coding platform Cursor, shortly after the aerospace firm’s landmark IPO and less than two months after initially announcing a strategic partnership between the two entities.

The transaction aims to bolster SpaceX’s AI division, which centers on Elon Musk’s xAI and was merged earlier this year, helping it compete with leading AI laboratories. Despite being a key promise of its IPO, SpaceX’s AI unit has undergone restructuring following multiple controversies, including incidents where users generated non-consensual deepfakes of women and children.

SpaceX confirmed on Tuesday that the acquisition is expected to close in the third quarter of this year.

Prior to SpaceX’s involvement, Cursor was nearing the completion of a $2 billion funding round led by investors such as Andreessen Horowitz, Thrive, and Nvidia, which would have valued the AI coding startup at $50 billion, according to TechCrunch.

Musk’s company announced a unique agreement in April ahead of its IPO: it would either acquire Cursor for $60 billion in stock or pay a $10 billion break-up fee if the deal did not proceed.

Cursor was experiencing rapid growth when this deal was first announced. However, one source told TechCrunch at the time that the $2 billion it planned to raise would not be sufficient to achieve profitability. This assessment came despite the startup previously securing $900 million in a Series C round in June 2025, followed by an additional $2.3 billion in late 2025.

Founded in 2022 as Anysphere, Cursor has seen explosive growth as AI-powered coding tools gained traction over the past two years. It participated in OpenAI’s startup accelerator in 2024 before raising enough capital to reach a valuation of approximately $29 billion prior to the SpaceX deal announcement.

Indications of SpaceX’s interest in Cursor emerged earlier this year when xAI hired two of the startup’s senior engineering leaders. Subsequently, in April, Business Insider reported that xAI had decided to lease some of its data center capacity to Cursor—a move reminiscent of similar arrangements SpaceX made with Anthropic and Google ahead of its IPO this year. These discussions between SpaceX and Cursor quickly evolved into the transaction currently being finalized.

The deal coincided with significant turmoil within xAI.

By the end of March, all 11 of Musk’s co-founders at xAI had departed, and Musk publicly acknowledged that xAI “was not built right [the] first time around,” stating he was rebuilding it “from the foundations up.” This admission followed controversies involving xAI’s Grok chatbot, which referred to itself as “MechaHitler” in 2025 and allowed users to generate nude and sexual deepfakes of women and children earlier this year. SpaceX disclosed in its IPO filings that such behavior poses a risk to its business, and the company currently faces numerous legal challenges resulting from these incidents.

xAI’s restructuring began as SpaceX moved toward what would become the largest IPO in history. During this process, SpaceX and its bankers pitched investors on a total addressable market of approximately $28 trillion. Nearly all of this—$26 trillion—was attributed to the company’s AI initiatives.

SpaceX projected a potential $2.4 trillion AI infrastructure business (including plans to build a satellite constellation for AI compute) and a $22.7 trillion opportunity in “enterprise applications.”

SpaceX is now relying on Cursor to help fulfill some of these promises. However, the prospect of acquiring the startup likely appeared more feasible post-IPO: Since going public last Friday, SpaceX’s stock has risen from its IPO price of $135 per share to over $200 per share in pre-market trading as of Tuesday morning, adding nearly $1 trillion—or roughly the value of 16 Cursors—to its valuation in just a few days.