SpaceX acquires AI coding start-up Cursor for $60B
What's the story
SpaceX, Elon Musk's company, has announced its acquisition of AI coding start-up Cursor for a whopping $60 billion. The deal comes just days after SpaceX's historic IPO and less than two months after the two companies announced their partnership. The acquisition is expected to bolster SpaceX's AI division and help it compete with major players in the field.
Division challenges
SpaceX's AI division faces restructuring
Despite being a key part of its IPO promises, SpaceX's AI division has been facing restructuring. The unit has been marred by controversies, including allowing users to create non-consensual deepfakes of women and children. The acquisition of Cursor is seen as a move to turn things around for the beleaguered division and catch up with other leading AI labs.
Start-up journey
Cursor was close to a $2 billion funding round
Before SpaceX showed interest, Cursor was close to a $2 billion funding round from investors like Andreessen Horowitz, Thrive, and NVIDIA. The AI coding start-up was on a fast track to success when the deal with SpaceX was first announced. Despite raising $900 million in a Series C round in June 2025 and another $2.3 billion late last year, the company still struggled financially.
Company evolution
Cursor's rapid rise and Musk's early interest
Founded in 2022 as Anysphere, Cursor has witnessed meteoric growth amid the rise of AI-powered coding tools. The company went through OpenAI's start-up accelerator in 2024 before the SpaceX deal was announced. Earlier this year, xAI (Musk's AI firm) hired two of Cursor's senior engineering leaders, hinting at Musk's interest in the start-up.