SpaceX is working with Cursor and has an possibility to purchase the startup for $60 billion

SpaceX stated it has struck a take care of Cursor to develop a subsequent era “coding and data work AI,” which features a stunning provision—an possibility to purchase the favored software program growth platform for $60 billion later this yr.

Partnering with and doubtlessly buying a pacesetter within the hottest AI product class can solely be seen within the context of SpaceX’s much-anticipated public providing. Buyers in search of extra worth within the IPO may see its engagement with Cursor as one other method to extract worth from Elon Musk’s more and more sprawling tech conglomerate.

The deal gained’t shock those that comply with the trade intently. Final week, it was reported that xAI would start renting computing energy from its knowledge facilities to Cursor, with the coding startup utilizing tens of hundreds of xAI chips to coach its newest AI mannequin. And final month, two of Cursor’s most senior engineering leaders, Andrew Milich and Jason Ginsberg, left the corporate to hitch xAI, the place each report on to Musk.

SpaceX described the partnership as a mission combining Cursor’s “product and distribution to professional software program engineers” with SpaceX’s Colossus supercomputer, which the corporate claims has the equal compute energy of 1,000,000 Nvidia H100 chips.

SpaceX additionally stated that at some undisclosed level later this yr, it’ll both pay Cursor $10 billion for its work or purchase the corporate for $60 billion. Final week, TechCrunch reported that Cursor was eying a $50 billion valuation in an upcoming non-public fundraising spherical. That determine itself displays an astonishing collection of leaps. Cursor was valued at simply $2.5 billion in January of final yr, climbed to $9 billion by final Could Could, and was assigned a $29.3 billion post-money valuation when it closed on $2.3 billion in Sequence D funding in November.

Both determine would signify a big expense for SpaceX, which is broadly seen to be dropping cash following the acquisition of xAI and the social media community X and is planning intensive capital funding. The transient assertion didn’t say if both deal might be paid in SpaceX inventory.

Within the meantime, the transfer may shore up weaknesses at every firm, nevertheless it additionally reveals them. Neither Cursor nor xAI has proprietary fashions that may match the main choices from Anthropic and OpenAI — the identical corporations now competing instantly with Cursor for the developer market.

Cursor nonetheless makes use of and sells entry to Claude and GPT fashions at the same time as each companies roll out their very own coding instruments, a clumsy association that this new SpaceX partnership could also be designed to ultimately escape.