SpaceX secures partnership and buyout option with Cursor for up to $60 billion

SpaceX announced a partnership and acquisition option with Cursor, the prominent AI coding assistant that has become the leading product in its category among software developers. Under the agreement, SpaceX will either pay $10 billion for the partnership work or acquire Cursor outright for $60 billion at an unspecified point later in 2026, according to the company's brief statement.

The arrangement involves integrating Cursor's product and distribution channels with SpaceX's Colossus supercomputer, which SpaceX claims delivers the computational equivalent of one million Nvidia H100 chips. This pairing appears designed to help Cursor develop proprietary models independent of reliance on existing competitors' offerings.

Cursor's valuation has accelerated dramatically, climbing from $2.5 billion in January 2025 to $9 billion by May 2025, then reaching $29.3 billion following its Series D round in November 2025, when the company raised $2.3 billion. A reported upcoming fundraising round suggested a potential $50 billion valuation. Both proposed transaction values would represent significant outlays for SpaceX, particularly given the company's recent capital-intensive acquisitions.

The partnership reflects deeper connections between Cursor and Musk's AI ventures. Last week, xAI announced it would lease computing power to Cursor for model training using tens of thousands of xAI chips. Additionally, two of Cursor's most senior engineering leaders—Andrew Milich and Jason Ginsberg—departed the company to join xAI in recent weeks, both reporting directly to Musk.

The deal underscores competitive pressures and dependency issues within the coding AI market. Cursor currently builds on and resells access to Claude and GPT models from Anthropic and OpenAI respectively, even as both companies launch competing coding tools. SpaceX's partnership and potential acquisition may aim to help Cursor develop models competitive with those of the market leaders.