SpaceX has announced a deal with Cursor to build a next-generation AI focused on coding and knowledge work. The agreement also includes an unusual option. SpaceX may acquire the software development platform later this year for $60 billion.
The move fits into wider expectations around SpaceX’s long discussed public offering. Investors watching the IPO may see the Cursor deal as part of a broader effort to increase value across Elon Musk’s expanding tech portfolio.
The partnership did not come as a surprise to industry watchers. Reports from last week said xAI will rent computing power to Cursor. The startup plans to use tens of thousands of xAI chips to train new AI models. Earlier, two senior Cursor engineers, Andrew Milich and Jason Ginsberg, left to join xAI and now report directly to Musk.
SpaceX described the project as a combination of Cursor’s product strength and distribution to software engineers with SpaceX’s Colossus supercomputer. The company claims Colossus delivers compute power equal to about one million Nvidia H100 chips.
SpaceX also outlined two possible outcomes later this year. It may pay $10 billion for Cursor’s work or move to a full acquisition at $60 billion. Cursor was recently linked to a private funding round targeting a $50 billion valuation.
The company has seen rapid valuation growth, rising from $2.5 billion in early last year to $9 billion by May. It later reached $29.3 billion after a $2.3 billion Series D round in November.
Either path would require major spending from SpaceX. The company has faced pressure from heavy investment across its ventures, including xAI and the social platform X. The statement did not confirm whether payment would involve SpaceX stock.
The deal also highlights gaps on both sides. Cursor and xAI still depend on external AI models. They rely on systems from Anthropic and OpenAI, both of which now compete in the coding space.
Cursor continues to offer access to GPT and Claude models. At the same time, those providers are launching their own developer tools. The SpaceX partnership may signal a shift away from that dependency over time.
