In a significant push into AI-driven software development, SpaceX has entered into a high-value agreement with fast-growing startup Cursor.
SpaceX, the rocket and satellite company founded by Elon Musk, has announced a major deal with AI startup Cursor. The agreement gives SpaceX the option to acquire the company for $60 billion later this year or invest $10 billion in their ongoing partnership. The move is part of Musk’s broader strategy to position SpaceX as a leader in AI-powered software development ahead of a potential public listing.
Cursor’s AI tool reshapes coding
Cursor’s AI assistant, launched in 2023, has changed how software is developed. It helps developers write, test, and debug code at scale. The tool has become widely used in what industry insiders call the “vibe coding” era, where AI-assisted workflows are transforming traditional coding practices.
Startup growth and funding plans
Founded in 2023, Cursor has rapidly emerged as one of the fastest-growing AI startups. Before the SpaceX deal, the company was in advanced talks to raise around $2 billion at a valuation above $50 billion. Andreessen Horowitz was expected to co-lead the round, with participation from NVIDIA and Thrive Capital.
Musk has been actively expanding his presence in the AI space. He co-founded OpenAI, the organisation behind ChatGPT, and later launched xAI, which developed the Grok chatbot. In 2025, SpaceX moved further into AI with initiatives such as orbit-based data centres and an AI chip factory. In February, SpaceX acquired xAI in a deal valued by Musk at $1.25 trillion.
Leadership comments on partnership
Cursor CEO Michael Truell confirmed the partnership on social media platform X. He said he was “excited to partner with the SpaceX team to scale up Composer,” referring to the company’s proprietary AI model. “A meaningful step on our path to build the best place to code with AI,” he added.
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