SpaceX buys Cursor for $60 billion in push to dominate enterprise AI

SpaceX's $60 billion acquisition of AI coding startup Cursor marks Elon Musk's most aggressive bet yet on enterprise software, turning the rocket company into a direct rival to OpenAI and Anthropic.

SpaceX said Tuesday it would acquire Anysphere, the developer of AI coding agent Cursor, for $60 billion in stock, just days after its blockbuster Nasdaq debut valued the company at more than $2 trillion. The deal, expected to close in the third quarter, gives Musk's rockets-to-AI empire a fast-growing product in one of the most commercially promising areas of artificial intelligence.

"Cursor gives us a direct channel to millions of developers who are already using AI to write production code every day," a SpaceX spokesperson said in a statement. The company exercised a call option secured in April that gave it the choice to buy Cursor for $60 billion or pay a $10 billion breakup fee to walk away.

Cursor, founded in 2022, has grown to roughly $2.6 billion in annualized business-to-business revenue, with enterprise sales accelerating sharply, according to company data. The startup raised $3.38 billion from investors including Thrive Capital, Andreessen Horowitz, Accel, Nvidia and Coatue. Under the deal's terms, Cursor will become a wholly owned subsidiary of SpaceX, with the purchase made in SpaceX shares — which have climbed more than 20 percent since the company's June 11 IPO.

The acquisition transforms SpaceX's AI ambitions overnight. Cursor competes directly with Anthropic's Claude Code and OpenAI's Codex in the fast-growing market for AI-powered coding tools, where developers use natural-language prompts to write, debug and modify software. The product has become central to the trend known as "vibe coding," in which engineers rely on AI assistants for routine programming work.

How Cursor fits into Musk's AI strategy

Cursor had already been working closely with xAI, the AI company that merged with SpaceX in February. In April, Cursor said it would use xAI's Colossus data center complex in Memphis, Tennessee, to train future models, citing a bottleneck in computing capacity. "We've wanted to push our training efforts much further, but we've been bottlenecked by compute," Cursor said at the time.

The computing relationship is now central to the deal's logic. Cursor has relied on foundation models from Anthropic and OpenAI to power its coding tools, but those companies are increasingly becoming direct competitors. Anthropic's Claude Code and OpenAI's Codex now target the same developers and enterprise customers that Cursor serves.

SpaceX has also struck cloud computing agreements worth roughly $26 billion annually with Anthropic and Google in recent weeks, according to people familiar with the matter. Both agreements include 90-day termination clauses, giving SpaceX the flexibility to reclaim computing capacity if needed.

What the deal means for the AI coding market

The $60 billion price tag makes this the largest acquisition of a venture capital-backed startup outside of Musk's self-deal for xAI earlier this year, according to Axios. The deal values Cursor at roughly 23 times its annualized B2B revenue, a premium that reflects the strategic importance of AI coding tools in the broader enterprise software market.

For SpaceX, the acquisition helps convert xAI from a chatbot-focused company — best known for Grok — into a broader enterprise AI player with a proven product and a developer-heavy customer base. The company estimated the total addressable market for AI products at nearly $26 trillion in a presentation to investors, according to TechCrunch.

Two heads of product engineering at Cursor joined SpaceX in March to work on lunar projects and xAI, signaling the tightening ties between the companies before Tuesday's announcement.

The deal also carries a cautionary note about the competitive dynamics in AI. Cursor's reliance on Anthropic and OpenAI for underlying models creates a tension that SpaceX will need to manage as it builds its own AI capabilities. If those companies restrict access to their models, Cursor's product could face disruption.

SpaceX shares, trading under the ticker SPCX on Nasdaq, rose in pre-market trading Tuesday following the announcement. The company's IPO raised $7.5 billion and was the largest in US history.

This article is for informational purposes only and does not constitute investment advice.