SpaceX to acquire AI coding platform Cursor for $60 billion

SpaceX is acquiring Cursor, an AI coding platform, for $60 billion in an all-stock transaction. This deal follows SpaceX's recent IPO and its merger with xAI, marking a strategic move to enhance its enterprise AI offerings. The acquisition is expected to close in the third quarter.

Cursor was an early innovator in integrating large language model features into an IDE, based on Visual Studio Code. However, it faced growing competition and market share decline from larger AI companies like Anthropic, despite its revenue growth. The company had previously struggled with compute bottlenecks.

xAI had already begun providing Cursor with access to its compute infrastructure and collaborated on training models, including Grok Build. This prior collaboration foreshadowed the current acquisition, which aims to combine Cursor's talent and product with SpaceX's compute capacity.

This acquisition is a direct response to the challenges both companies faced in the AI race. SpaceX, through xAI, lacked a competitive coding model, while Cursor couldn't compete on compute resources. The union seeks to leverage Cursor's technology and talent with SpaceX's infrastructure to become more competitive in the enterprise AI market.