SpaceX has secured a sweeping option that could reshape the market for ai developer tools, giving it the right to buy Cursor for $60 billion later this year.
Summary
What SpaceX agreed to
According to the announcement on X, the company could instead choose a $10 billion working partnership. The move pulls Cursor, the coding assistant startup used by software teams to write code faster, closer to Elon Musk’s expanding circle.
The timing also matters. The agreement comes shortly before SpaceX is expected to go public, in what could become one of the largest IPOs in history.
How Cursor grew so fast
Cursor is owned by parent company Anysphere and was co-founded in early 2022 by four MIT students: Michael Truell, Aman Sanger, Sualeh Asif, and Arvid Lunnemark. The company released its first product in March 2023 and quickly spread through the developer community.
By November 2023, it had cataloged 150,000 codebases. In June 2024, it raised a $60 million Series A round led by Andreessen Horowitz.
Growth accelerated in 2025. Cursor’s valuation began the year at $2.5 billion and ended it at $29.3 billion after a $2.3 billion Series D in November. Before that, it secured a $900 million round in June 2025, when it was valued at $9.9 billion.
Moreover, the company is reportedly in talks for another $2 billion round at a valuation above $50 billion. Andreessen Horowitz and Thrive Capital are expected to co-lead, with Nvidia and Battery Ventures also joining.
Revenue and adoption kept climbing
Cursor reported annualized revenue of $500 million in May 2025, rose to $1 billion by October, and topped $2 billion by February 2026. It says its tools are used by 67% of the Fortune 500, including Uber and Adobe.
In addition, Cursor says those systems generate 150 million lines of enterprise code each day. Jensen Huang, CEO of Nvidia and an investor and partner, said his engineers are using Cursor-assisted coding and that productivity has improved.
Cursor also describes its product as part of cursor ai coding workflows used across large organizations, with the company positioning itself as a core cursor ai coding platform for teams that want to move faster.
Competition is heating up
However, the rapid rise has brought pressure. Anthropic launched Claude Code as a research preview in February 2025, and adoption followed quickly. By early 2026, Claude Code reportedly had a $2.5 billion annual run rate and more than 300,000 business customers.
Cursor focuses on helping developers as they write code, while Claude Code is built to generate larger chunks on its own. That difference has sharpened the competition around cursor ai coding assistant products and wider openai anthropic competitor dynamics.
Some industry commentary has suggested Cursor may be losing ground. Reports say a startup called Valon moved away from Cursor in February 2026, and some engineers left Cursor in March to join SpaceX and xAI.
There is also a pricing challenge. Cursor buys access to models from OpenAI and Anthropic, even though those companies compete with it. The firm has been developing its own model, Composer, since 2025. While it has reportedly performed well on some benchmarks, it has not consistently beaten the latest OpenAI models.
That said, Cursor said model training has been limited by compute. The SpaceX arrangement would give it access to xAI’s Colossus supercomputer cluster in Memphis, opening the door to much larger training runs.
In recent months, observers have compared the field to other fast-moving rivals such as lovable ai coding startup and vibe coding startup windsurf launches in house ai models, as the broader market for code-generation tools keeps evolving.
Why SpaceX is moving now
SpaceX is also advancing for strategic reasons. It filed paperwork with the SEC for an IPO in early April and planned a roadshow in early June. In February, it merged with xAI in a deal valued at $1.25 trillion, and it is reportedly seeking a $1.75 trillion valuation.
Moreover, SpaceX ended 2025 with $24.7 billion in cash, giving it significant flexibility as it weighs a spacex acquisition deal or a partnership structure. The company’s access to capital may prove decisive as it expands its reach through elon musk xai initiatives.
Cursor’s CEO said the deal marks an important step toward building a long-lasting AI coding platform. He also stressed how hard it is to create durable value in an industry that changes quickly. For now, the agreement places the ai coding startup at the center of one of the year’s most closely watched tech stories.
