A high-stakes agreement links SpaceX’s computing power to Cursor’s developer tools, and includes an unexpected $60 billion buy option that could reshape the AI market.
SpaceX announced a strategic partnership with Cursor to develop a new generation of artificial intelligence for coding and knowledge work. As part of the deal, there is an unexpected condition – an option to buy the popular software development platform for $60 billion later this year.
Such collaboration and the potential acquisition of a leader in the AI products category create a context for SpaceX’s anticipated public listing. Investors seeking greater value in an IPO may consider SpaceX’s involvement in Cursor as a new way to capitalize on Elon Musk’s potential and his technology empire.
SpaceX’s partnership with Cursor and its potential impact on AI development
According to one version of the deal, xAI will begin leasing compute power from Cursor’s data centers, deploying tens of thousands of xAI chips to train a new AI model. Last month, two top Cursor engineers joined xAI and report to Musk. SpaceX described the partnership as a fusion of Cursor’s product with distribution among seasoned developers and its own supercomputer Colossus, which, according to the company, has a capacity equivalent to one million Nvidia H100 chips.
According to an incomplete overview, at some undisclosed moment later this year SpaceX will either pay Cursor $10 billion for their work or acquire the company for $60 billion. Earlier, TechCrunch reported that Cursor expected a valuation of around $50 billion during a future private funding round. Early last year Cursor was valued at $2.5 billion, in May at $9 billion, and after raising $2.3 billion in a Series D round in November – at $29.3 billion.
Any of these sums would represent significant spending for SpaceX, which, according to analysts, became profitable after acquiring xAI and the X social network and plans to scale up capital expenditures. The report did not indicate whether the deal could be paid for with SpaceX stock. Such moves could strengthen both companies, but also reveal their limitations: Cursor and xAI still do not have leading models that could compete with Anthropic and OpenAI in the developer market.