SpaceX Buys Cursor for $60 Billion

SpaceX on Tuesday announced it entered a formal agreement to buy the artificial intelligence startup Cursor for $60 billion worth of stock , less than a week after Elon Musk's company completed the largest initial public offering in history. In a filing, SpaceX confirmed the deal will be an all-stock transaction, with the company expecting the acquisition to close during the third quarter, pending regulatory approvals.

This is the largest acquisition ever of a VC-backed startup , according to Axios, eclipsing Microsoft's $68.7 billion purchase of Activision Blizzard. SpaceX shares were up 8% in early trading on Tuesday, lifting the company's market capitalization to more than $2.7 trillion.

How Did SpaceX Lock In the Deal?

The agreement follows an option SpaceX secured in April of this year, which gave it the right to either pay roughly $10 billion for a partnership with Cursor or acquire the company for $60 billion later in the year.

Musk's company also said at the time that Cursor had granted it approval to either buy the company for $60 billion or pay $10 billion to "work together."

The $60 billion in class A common stack that SpaceX has agreed to pay to acquire Cursor represented a 3.4% dilution at the aerospace and tech conglomerate's IPO valuation.

SpaceX also noted that in case the deal is terminated, it would be liable to pay a breakup fee of $10 billion.

The timing is no accident. SpaceX is selling 555.6 million shares at $135 a piece, raising $75 billion in the largest IPO on record.

The company raised some $75 billion selling more than 555 million shares at its offer price of $135, making it the biggest IPO in history. That fresh stock currency made the all-equity Cursor deal structurally possible.

What Is Cursor Worth to SpaceX?

Cursor built a popular AI coding tool that helps software developers generate, edit and review code, and the company has experienced explosive growth since its founding in 2022.

Founded in 2022, Cursor has grown quickly, reporting roughly $2.6 billion in annualised business-to-business revenue, according to company data shared with Reuters this month.

That growth trajectory is remarkable. Cursor has been at the centre of this growth: the company went from $100 million in annual recurring revenue in January 2025 to $500 million by June, passed $1 billion by November 2025, and reached $2 billion by February 2026.

Anysphere now expects to reach more than $6 billion in annual recurring revenue by the end of 2026.

Cursor raised $3.38 billion since its 2022 founding, from firms like Thrive Capital, a16z, OpenAI Startup Fund, BoxGroup, Dorm Room Fund, Accel, DST Global, WndrCo, CRV, Coatue, Nvidia, Hanabi Capital, and Lauder Partners. At a $60 billion exit, those investors will receive SpaceX Class A shares in exchange for their stakes.

Why AI Coding Tools Matter Now

The acquisition puts SpaceX in direct competition with the biggest names in enterprise AI. This acquisition puts SpaceX in direct competition with Microsoft, which owns GitHub Copilot and offers Gemini Code, and with Anthropic, which recently launched Claude Code.

GitHub Copilot X remains the market leader with approximately 37 percent market share, but challengers including Cursor, Codeium (now Windsurf), Amazon Q Developer, and Google's Gemini Code Assist have carved out significant territory.

The market is growing fast. The AI coding tools market has exploded to an estimated $12.8 billion in 2026, up from $5.1 billion in 2024.

It will grow from $7.65 billion in 2025 to $9.46 billion in 2026 at a compound annual growth rate (CAGR) of 23.7%.

Launched in 2022, Cursor helped spark a trend called "vibe coding" as AI coding tools have become increasingly capable of autonomously producing computer software.

GitHub reports that over 51 percent of all code committed to its platform in early 2026 was either generated or substantially assisted by an AI code generator.

The xAI Connection

SpaceX's push into AI coding comes months after a major corporate restructuring. SpaceX has acquired xAI, the company announced on Monday, merging two of Elon Musk's most ambitious companies into the most valuable private company in the world.

The SpaceX acquisition of xAI closed in early February 2026, creating a combined entity valued around $1.25 trillion and formalizing Elon Musk's consolidation of rockets, satellites, AI infrastructure, and data platforms under one roof.

SpaceX confirmed that its AI arm, SpaceXAI (formerly xAI, which merged with SpaceX in February 2026), has been jointly training a model with Cursor for the past several months, leveraging xAI's Colossus supercomputing infrastructure.

In a social media post on Tuesday, SpaceX said it has been jointly training an AI model with Cursor and will release it soon.

What Changed This Week

SpaceX executed the largest acquisition of a venture-backed startup in history, paying $60 billion in stock for Cursor just days after raising $75 billion in the biggest IPO ever recorded. The deal gives SpaceX immediate access to a developer tool generating $2.6 billion in annual revenue and growing at a pace no enterprise software company has matched. With 50,000 enterprise customers and backing from Nvidia, OpenAI, and Andreessen Horowitz, Cursor brings both revenue and strategic positioning in the AI coding wars against Microsoft, Google, and Anthropic.

What to Watch

The deal is expected to close in the third quarter, pending regulatory approvals. Watch for antitrust scrutiny given SpaceX's $2.7 trillion market cap and the deal's size. SpaceX has promised to release a jointly trained AI model with Cursor soon, which will signal how deeply the two companies have already integrated their technology. The breakup fee structure—$10 billion if the deal falls apart—suggests both sides expect regulatory challenges. Finally, watch how Microsoft and Anthropic respond: SpaceX now controls a major competitor to GitHub Copilot and Claude Code, and the competitive dynamics in AI developer tools just shifted dramatically.

Reporting based on coverage from CNBC, Reuters, Bloomberg, Yahoo Finance, CBS News, Axios, Euronews, TechCrunch, NPR, June 16, 2026.