SpaceX said it has entered a deal with AI coding startup Cursor to develop a next-generation “coding and knowledge work AI.” The deal also includes a provision that allows SpaceX to buy the startup for $60 billion later this year.
“SpaceXAI and @cursor_ai are now working closely together to create the world’s best coding and knowledge work AI,” SpaceX said on X. “The combination of Cursor’s leading product and distribution to expert software engineers with SpaceX’s million H100 equivalent Colossus training supercomputer will allow us to build the world’s most useful models.”
“Cursor has also given SpaceX the right to acquire Cursor later this year for $60 billion or pay $10 billion for our work together,” the post noted.
READ: Musk bought $1.4 billion worth SpaceX shares in 2025, report reveals (April 21, 2026)
This comes shortly after Elon Musk’s company confidentially filed for an IPO. Sources suggest the company may target a valuation of more than $1.75 trillion, making it one of the largest stock market listings ever. According to TechCrunch, investors seeking value in the IPO might see its engagement with Cursor as another way to extract value from the company.
The TechCrunch report says this deal is unsurprising to those who follow the industry closely. Last week, it was reported that xAI would begin renting computing power from its data centers to Cursor, with the coding startup using tens of thousands of xAI chips to train its latest AI model. In February, two of Cursor’s most senior engineering leaders, Andrew Milich and Jason Ginsberg, left the company to join xAI, where both report directly to Musk.
SpaceX said this partnership was a project combining Cursor’s “product and distribution to expert software engineers” with SpaceX’s Colossus supercomputer, which the company claims has the equivalent compute power of a million Nvidia H100 chips.
READ: SpaceX IPO: Elon Musk’s rocket giant files confidentially (April 1, 2026)
SpaceX also said that at some undisclosed point later this year, it will either pay Cursor $10 billion for its work or acquire the company for $60 billion. Another TechCrunch from last week revealed that Cursor was looking at a $50 billion valuation in an upcoming private fundraising round. This reveals a series of leaps — Cursor was valued at just $2.5 billion in January 2025, climbed to $9 billion by May 2025, and was assigned a $29.3 billion post-money valuation when it closed on $2.3 billion in Series D funding in November of the same year.
Cursor still uses and sells Claude and GPT models even as both firms now roll out their own coding tools. The SpaceX partnership might help the AI coding startup escape this awkward arrangement.