A 3D-printed figurine of SpaceX CEO Elon Musk and the logo of xAI, the artificial intelligence (AI) startup he founded. Reuters-Yonhap News
SpaceX, the aerospace company led by Elon Musk, has made a surprise move to acquire a three-year-old startup for approximately 90 trillion won to bolster its artificial intelligence (AI) coding capabilities.
According to The Wall Street Journal on Friday (local time), SpaceX announced through the social network X, formerly known as Twitter, that it has secured the right to acquire coding startup Cursor for $60 billion (88.644 trillion won) by the end of this year. If the acquisition does not go through, SpaceX is obligated to pay Cursor $10 billion for a new partnership. In effect, the deal is on the verge of being finalized.
Cursor is a three-year-old startup founded in 2023 by four graduates of the Massachusetts Institute of Technology (MIT) in the United States. The company initially developed an encrypted messaging service before pivoting to AI coding. The WSJ assessed that Cursor has established itself as a key player leading “vibe coding,” which enables developers to code by simply entering natural language through AI. SpaceX said through its X account that day, “SpaceXAI and Cursor are working closely together to build the world’s best coding and knowledge AI.”
The deal comes after Musk recently said he would strengthen xAI’s coding capabilities, which have lagged behind competitors. SpaceX expanded its footprint in February this year by acquiring Musk’s AI company xAI. However, Grok, the AI chatbot developed by xAI, has been evaluated as trailing rival models in AI coding. Amid efforts to address this weakness, SpaceX last month recruited Andrew Milich and Jason Ginsburg, Cursor’s product engineering leaders, a move that led to the current Cursor acquisition. Last month, xAI cut its overall workforce while increasing engineer hiring. Bloomberg noted that “competition among AI coding startups is intensifying as many AI companies, including Anthropic and OpenAI, are successively launching products to streamline software development.”
SpaceX is preparing for an initial public offering (IPO) in June this year. Through the IPO, the company aims to raise $75 billion and secure a valuation of approximately $1.75 trillion.