Musk’s SpaceX buys AI coding start-up for $60bn days after IPO

SpaceX, Elon Musk’s rocket company, will acquire AI coding startup Cursor for $60 billion in stock, finalizing a deal first announced in April. The acquisition follows Cursor’s successful initial public offering (IPO), which valued the company at a significant valuation. Cursor’s AI-powered coding tools, used by major firms including Stripe, Adobe, and Nvidia, will integrate with SpaceX’s AI division, xAI, which operates the Grok chatbot. The deal was structured under a previous agreement allowing SpaceX to either buy Cursor outright for $60 billion or invest $10 billion in their joint projects. Cursor’s technology automates code writing, positioning it alongside competitors like OpenAI and Anthropic. SpaceX’s move aligns with its push to expand beyond rocket manufacturing into AI, leveraging Cursor’s expertise and its own supercomputing infrastructure, including the Colossus training system. SpaceX’s stock surged after its Nasdaq listing, making it the world’s fifth-most-valuable company with a market cap exceeding $2.9 trillion. The company’s valuation reflects optimism about future earnings, despite ongoing losses—SpaceX reported a $9 billion combined loss over 2025 and 2026 due to heavy AI and infrastructure investments. The acquisition is expected to close by the end of September, with Cursor shareholders receiving SpaceX shares worth $60 billion. While SpaceX remains unprofitable, its focus on AI and satellite projects like Starlink complements its core rocket business. The deal underscores Musk’s strategy to merge AI innovation with SpaceX’s existing operations, potentially reshaping both industries. Cursor’s CEO, Jensen Huang of Nvidia, has previously called it his ‘favorite enterprise AI service,’ highlighting its industry influence.