Till a couple of hours earlier than SpaceX introduced its deal, giving it the choice to amass Cursor — the maker of AI-powered coding software program — for $60 billionCursor was on monitor to shut a $2 billion funding spherical later this week, in keeping with an individual aware of the matter. The spherical would have valued the corporate at $50 billion. SpaceX mentioned it could both purchase the corporate sooner or later later this 12 months or pay $10 billion to Cursor to collaborate on AI growth.
Cursor was apparently operating a parallel course of, negotiating a possible acquisition by SpaceX whereas concurrently finalizing a personal funding spherical with traders that embody Andreessen Horowitz, Thrive, Nvidia, and Battery Ventures, particulars of which have been first reported by TechCrunch final week.
It’s not unusual for startups to have interaction in acquisition discussions whereas concurrently elevating new capital. Whereas many personal corporations want to stay impartial, Cursor’s $2 billion increase would have fallen in need of the capital wanted to achieve cash-flow breakeven, doubtless forcing the corporate to lift substantial funding later, the particular person mentioned.
SpaceX, which not too long ago merged with xAI, has been aiming to beef up its AI capabilities to higher compete with leaders like Anthropic and OpenAI. Buying Cursor provides Elon Musk’s firm a greater probability of difficult rivals in AI coding, presently probably the most profitable software of the know-how.
Nonetheless, SpaceX is delaying the potential acquisition of Cursor till after its IPO this summer season. That is largely as a result of the corporate needs to keep away from updating its confidential monetary filings earlier than the itemizing, and will probably be simpler to finance the $60 billion buy utilizing its new, publicly traded inventory.
The deal seems to learn either side for a number of causes.
Regardless of quick income progress, Cursor is going through fierce competitors from Anthropic’s Claude Code and OpenAI’s Codex. Provided that risk, the startup may face challenges in persevering with to lift personal capital to finance its large computing wants. Even when SpaceX doesn’t undergo with the acquisition, Cursor is receiving a $10 billion capital injection paid out over time from Elon Musk’s firm.
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Moreover, if SpaceX goes by means of with the acquisition, the house big will doubtless preserve all the Cursor workforce intact. In contrast to Google’s buy of Windsurf, which was structured as an acqui-hire of key people, SpaceX presently lacks a significant AI workforce and is broadly seen as not having a big AI enterprise.
In the meantime, SpaceX has entry to huge computing capability at its knowledge facilities in Mississippi and Tennessee, which it may possibly supply Cursor, probably in lieu of a part of the $10 billion “collaboration” fee promised the coding startup.
The corporate would additionally like public traders to worth it as greater than only a house and satellite tv for pc enterprise. By promising to probably purchase Cursor, SpaceX positions itself as an AI firm, giving it an opportunity to garner the a lot greater valuation a number of that Wall Avenue presently assigns to AI corporations.
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