SpaceX has exercised its option to acquire Cursor, the popular AI-powered code editor, in a $60 billion all-stock transaction. Announced on June 16, the deal comes just days after SpaceX’s record-breaking IPO and fulfills an agreement first revealed in April.
"SpaceX has exercised the option to acquire Cursor in an all-stock transaction with the goal of building the world’s most useful AI models," posted SpaceX. "We're excited to join forces with SpaceX to advance the frontier of useful AI," posted Cursor. "Expect significant improvements to Cursor soon."
The acquisition aims to accelerate the development of AI models for coding and knowledge work. For the past several months, teams from SpaceX and xAI have been jointly training a new model in collaboration with Cursor. This model is expected to be released in both the Cursor platform and xAI’s Grok Build in the coming weeks.
Rapid integration
In February, Elon Musk merged xAI into SpaceX. This integration brought xAI’s AI research, models, and infrastructure - including the massive Colossus supercomputer - under the SpaceX umbrella, creating a combined entity with greater resources for frontier AI development while maintaining xAI’s focus on building advanced models like Grok.
Cursor has rapidly become a leading tool among professional developers, used by a significant portion of Fortune 500 companies. By combining Cursor’s user-friendly interface and distribution with xAI’s frontier models and the massive Colossus training cluster, SpaceX seeks to create a tightly integrated stack spanning compute, models, and developer tools.
The deal builds on an agreement announced in April, under which Cursor granted SpaceX the right to acquire the company later in 2026 for $60 billion or pay $10 billion. With the option now exercised, Cursor will become a wholly owned subsidiary of SpaceX. The move seems a significant step toward vertical integration in the AI coding space. A new jointly developed model rolling out across both Cursor and Grok Build signals closer technical alignment between the two platforms in the near term.