SpaceX cuts a deal to maybe buy Cursor for $60 billion

In a highly unusual pre-IPO maneuver, SpaceX has announced a deal with AI coding startup Cursor that presents two stark options: acquire the company for $60 billion or pay a $10 billion fee for collaboration. The arrangement, confirmed by SpaceX via tweet, is framed as securing "the world's best coding and knowledge work AI" by merging Cursor's platform for expert software engineers with SpaceX's massive computing infrastructure, referred to as the million H100-equivalent "Colossus" training supercomputer. This comes as Elon Musk's combined X companies (SpaceX, xAI, X) are reportedly valued at $1.25 trillion ahead of a public offering.

The deal underscores the intensifying AI arms race, particularly in the coding assistant space. Reports indicate Google has a "strike team" working on agentic AI tools, while OpenAI previously declared a "code red" to focus on its ChatGPT superapp and Codex tool. The $60 billion price tag is notable given that Cursor was recently in the process of raising $2 billion at a $50 billion valuation. The structure of the deal—a massive acquisition or a staggering $10 billion 'breakup fee' for collaboration—is unprecedented and highlights the strategic premium placed on AI talent and technology as Musk's empire prepares for the public markets.