In a major development in the AI and coding space, Cursor has entered into a strategic partnership with SpaceX that could lead to a potential acquisition later this year.
As part of the agreement, SpaceX has secured an option to acquire the AI coding platform for $60 billion. If the acquisition does not go through, the aerospace company will pay $10 billion for joint development efforts.
The collaboration is focused on building advanced AI models for coding. Cursor stated, “With this partnership, our team will leverage xAI’s Colossus infrastructure to dramatically scale up the intelligence of our models.”
SpaceX highlighted the combined strength of both companies, saying, “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.”
Colossus, located in Memphis, Tennessee, is currently considered the world’s largest AI training cluster. It was initially built by xAI in 122 days and is now being expanded to support the computational equivalent of 1 million GPUs. SpaceX recently acquired xAI, bringing the facility under its control.
The partnership comes as SpaceX prepares for a potential public listing. Earlier in April, reports suggested the company filed for an initial public offering targeting a valuation of $1.75 trillion. Regulatory filings also showed a consolidated loss of $4.94 billion last year, largely due to increased spending on AI infrastructure after the xAI acquisition.
Meanwhile, Cursor is also in talks to raise at least $2 billion at a $50 billion valuation, a sharp rise from its current $29 billion valuation. Reports earlier this year indicated that the company reached $2 billion in annualised revenue, with projections suggesting it could exceed $6 billion by the end of the year.
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