SpaceX to acquire AI coding startup Cursor for $60 billion to rebuild xAI

SpaceX to acquire AI coding startup Cursor for $60 billion to rebuild xAI

SpaceX has agreed to acquire AI coding startup Cursor for $60 billion in stock, less than two months after an initial agreement gave it the option to either invest $10 billion or pursue a full buyout. The all-stock deal is expected to close later this year. Cursor is best known for its AI coding tool of the same name.

The acquisition is described as a move to help SpaceX strengthen its xAI division, which has faced major internal and public challenges. The group recently saw all 11 of its cofounders leave after Grok generated offensive responses and enabled users to create sexualized images involving women and minors. Elon Musk later said xAI “was not built right the first time around” and that the division is being rebuilt from the ground up, framing Cursor as part of that process.

Separately, Cursor launched an iOS beta through TestFlight that lets users control Mac-based AI coding from mobile. The company also announced Origin, a GitHub competitor for code storage, Git hosting, reviews, and collaboration, which is currently available through a waitlist and planned for wider release this fall.

by Mauricio B. Holguin

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Cursor is an AI-first code editor aimed at enhancing software development through AI-driven pair-programming. Rated 4.3, it offers features like AI-powered assistance, extensibility via plugins and extensions, and code formatting capabilities. Designed to accelerate coding tasks, Cursor is positioned as a tool for developers seeking to integrate AI into their coding workflow.

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UserPower
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Funnily, Cursor was valuated $30B last November (before Anthropic raise API cost to favor Claude Code), then the user base (less than two million, when Claude Code has about 5 million users and GitHub Copilot has about 20 million users) and ARR plumbed, so Anysphere struggled to find new investors daring to put some money into it, and talks for a new round of funding (that would have valuated Cursor $50B) didn't gone anywhere.

So given Cursor user base, it wouldn't be valuated more than $10B nowadays (and much less over time since Claude Code is being heavily adopted), and since all the tool had been written to exclusively use Anthropic API, it could need a complete rewrite. But coming from a company like xAI that dumped $20B to build some datacenters and a lame chatbot, to only make less than $1B in revenue from it, everything is possible.

Gu