SpaceX nonetheless has deep roots within the rocket enterprise, however the Elon Musk-owned firm is doubling down on artificial intelligence because it prepares for an IPO.
In a social media post Monday afternoon, SpaceX introduced it had began a working relationship with AI coding startup Cursor, which incorporates an possibility to purchase the corporate for $60 billion. (Ought to SpaceX resolve in opposition to shopping for Cursor, it’ll pay $10 billion for its work.)
“The mixture of Cursor’s main product and distribution to skilled software program engineers with SpaceX’s million H100 equal Colossus coaching supercomputer will permit us to construct the world’s most helpful fashions,” the corporate stated within the submit.
The announcement comes simply over two months after SpaceX acquired Musk’s xAI, which runs the Grok chatbot. It additionally comes because the rocket firm prepares for what is anticipated to be a record-setting IPO later this 12 months, probably bringing in billions of {dollars}.
Cursor is a standalone startup that gives AI that writes code and debugs software, very like Anthropic’s Claude Code and OpenAI’s Codex. The product is named Composer.
The tool, which has been publicly praised by Nvidia CEO Jensen Huang, learns a developer’s coding type, then autocompletes, critiques, and, when obligatory, edits code. Customers can change between completely different AI fashions at current, which has elevated Cursor’s prices. Composer has achieved cult standing amongst many tech firms, although critics say Composer can be slow, particularly when used with bigger codebases. (It additionally suffered a PR black eye when its customer support AI hallucinated, triggering a wave of cancellations.)
Whereas many traders anticipate AI firms to play a significant position in future growth, the programs are presently main monetary drains. xAI, for example, reported a internet lack of $1.46 billion within the quarter ending Sept. 30, 2025, and lost $1 billion the quarter earlier than that.
Greater than 60% of SpaceX’s 2025 income got here from the Starlink satellite tv for pc web service, in keeping with reports based mostly on the corporate’s confidential IPO paperwork. Nonetheless, the corporate is reinventing itself with a heavy concentrate on AI as that IPO looms.
Cursor was based in 2023 by 4 MIT graduates, all nonetheless of their 20s. It raised $2.3 billion in funding final November from traders together with Nvidia and Google, giving it a valuation of $29.3 billion on the time. The SpaceX provide is greater than twice that quantity.
The founders had beforehand resisted takeover offers from main AI firms. Michael Truell, co-founder and chief government officer of Cursor, advised The Wall Avenue Journal final 12 months that “all the AI labs are necessary companions to us.”
An acquisition by SpaceX would seemingly change Cursor’s relationship with AI giants corresponding to OpenAI and Anthropic, that are xAI opponents (and the historical past between Musk and OpenAI is a tense one, to place it mildly, with a fierce court battle between the 2 starting quickly).
“Excited to associate with the SpaceX workforce to scale up Composer,” Truell wrote on X after the deal was introduced. “A significant step on our path to construct the perfect place to code with AI.”
Musk has been focusing extra consideration on the AI sector lately. Along with merging SpaceX and xAI, he unveiled plans final month for the Terafab chip manufacturing manufacturing facility in Austin, Texas, which is able to produce chips for SpaceX and xAI. Whereas xAI and different synthetic intelligence firms have largely trusted TSMC, Samsung, and Micron for the chips that energy their programs, Musk stated current semiconductor producers weren’t producing chips quick sufficient for his wants.
Intel stated earlier this month it had joined forces with Musk to assist with manufacturing on the facility, although particulars in regards to the association weren’t introduced.
