What is Cursor? SpaceX Could Buy the AI Company for a Whopping $60 Billion

SpaceX said that Cursor had given it the right to outright buy the startup later this year for $60 billion, far more than its most recent private-market valuation. Otherwise, SpaceX could pay Cursor $10 billion for their collaboration.

Last November, Cursor said that it had closed a $2.3 billion funding round at a $29.3 billion post-money valuation. Just five months earlier, the startup was valued at $9.9 billion after raising $900 million. And the company is set to raise another roughly $2 billion in a funding round that would value it at more than $50 billion, according to Bloomberg News.

A representative for Cursor did not immediately return a request for comment.

It’s unclear when SpaceX could officially buy Cursor, were it to pursue that option. The announcement comes as SpaceX prepares for a historic initial public offering that could happen as early as June, and as xAI looks to compete against the likes of OpenAI and Anthropic, both of which have emphasized AI coding tools.

SpaceX aims to raise around $75 billion in its IPO and ended 2025 with $24.7 billion in cash on hand, Reuters has reported, citing excerpts of the company’s confidential registration filing.

Adding Cursor to SpaceX’s empire would be expensive but give the company access to a popular tool widely used by developers and engineers. On its website, Cursor cites endorsements from leaders at Stripe, OpenAI and Eureka Labs.

“My favorite enterprise AI service is Cursor,” Nvidia’s Huang told CNBC in October. “Cursor is an AI coder and every one of our engineers, 100 percent, is now assisted by AI coders, and our productivity has gone up incredibly.”

Cursor launched its first AI coding assistant in 2023. The tool quickly became popular and has helped lead to the rise of “vibe coding.” Earlier this month, it unveiled Cursor 3, which it called a “unified workspace” for building software with assistance from AI agents.

The company also recently launched Composer 2, a model that it promoted as offering “frontier-level” coding intelligence. However, it was later reported to have been based on a Chinese company’s open-source model.

“Yes, that is the base we started from,” Lee Robinson, a Cursor vice president, said on X. “And we are following the license through inference partner terms.”

Michael Truell, Cursor’s CEO, said on X on Tuesday that the arrangement marked a “meaningful step on our path to build the best place to code with AI.”

In a blog post on Tuesday, Cursor said its efforts to train more capable models was “bottlenecked by compute.” It plans to leverage xAI’s infrastructure to “dramatically scale up” its models’ intelligence.

Cursor has said that it has annualized revenue of more than $1 billion and that its products are used by more than half of the Fortune 500, including Uber Technologies and Adobe. It counts both Google and Nvidia as investors and partners.

The company’s growth is rapid but dovetails with the surge of hype around AI companies. Anthropic and OpenAI are both widely expected to pursue IPOs as soon as this year and have seen their valuations skyrocket in a relatively short period of time.