SpaceX is acquiring Cursor for $60 billion in stock, days after a blockbuster IPO

At SpaceX Agreed Acquires AI programming startup Cursor in a $60 billion stock deal, just days after the space company’s historic IPO and less than two months later Announcing the connection between the two.

The deal is intended to help SpaceX’s AI division — built around Elon Musk’s xAI company, which SpaceX merged with earlier this year — catch up with major AI labs. Despite being the focus of IPO promises, SpaceX’s artificial intelligence division has been in the midst of a restructuring after being hit by repeated controversies, such as allowing users to create deepfake photos of women and children without consent.

SpaceX said on Tuesday that the acquisition is likely to occur in the third quarter of this year.

Before SpaceX came knocking, Cursor was on track to close a $2 billion funding round from companies like Andreessen Horowitz, Thrive, and Nvidia that would have valued the AI ​​programming startup at $50 billion, TechCrunch reported. I mentioned.

Musk’s company announced a bizarre deal in April ahead of its IPO: it would either buy Cursor for $60 billion in stock, or pay a $10 billion breakup fee if the deal fell through.

The index was growing rapidly when this deal was first announced. But one source told TechCrunch at the time that the $2 billion it was planning to raise wouldn’t be enough to help it break even. This is despite the startup previously raising $900 million in a Series C in June 2025, and another $2.3 billion in late 2025.

Founded in 2022 as Anysphere, Cursor has grown rapidly with AI-powered programming taking off over the past two years. It went through OpenAI’s startup accelerator in 2024 before raising enough money to end up with a price tag of about $29 billion before the SpaceX deal was announced.

Signs of SpaceX’s interest in Cursor emerged earlier this year when xAI hired two senior engineering leaders at the startup. Then, in April, Business Insider reported that xAI decided to lease some of it Index data center capacity — a reference to similar deals SpaceX struck with Anthropic and Google before going public this year. Those talks between SpaceX and Cursor quickly evolved into the deal that is now being finalized.

The deal also took place at the same time that XAI was collapsing.

All 11 of Musk’s co-founders at xAI had left the company by the end of March, and Musk publicly admitted that xAI “wasn’t built right (the) first time” and that he was rebuilding it “from the foundations up.” This came after xAI’s Grok chatbot He calls himself “MechaHitler” in 2025, allowing users to generate deep nudity and sexual clips of women and children Earlier this year. SpaceX told investors in its IPO filings that such behavior represented a risk to its business, and the company currently faces a number of legal challenges as a result of these actions.

The unbundling of xAI began as SpaceX began moving toward what would become the largest IPO in history. In the process, SpaceX and its bankers have pitched to investors that the company faces a total addressable market of about $28 trillion. Almost all of it — $26 trillion — was centered around the company’s AI efforts.

SpaceX told investors that it expects a potential $2.4 trillion AI infrastructure business (including its announced plans to build a constellation of satellites that handle AI computing) and a $22.7 trillion opportunity in “enterprise applications.”

SpaceX is now counting on Cursor to deliver on some of these promises. But the prospect of a startup being acquired seems easier to digest post-IPO: Since SpaceX went public last Friday, its IPO price has soared from $135 per share to more than $200 per share in pre-market trading as of Tuesday morning, adding nearly $1 trillion — or roughly 16 ticks — to its valuation in just a few days.