Elon Musk’s SpaceX has secured an agreement granting it the option to acquire Cursor, a rapidly growing AI coding start-up, for $60 billion as the rocket maker pushes deeper into AI ahead of its hotly anticipated IPO.
The Financial Times reports that SpaceX announced that it is collaborating with Cursor to develop what it describes as the world’s best coding and knowledge work AI, with SpaceX holding an option to purchase Anysphere, Cursor’s parent company, for $60 billion during 2025. Should SpaceX choose not to complete the acquisition, it would owe a $10 billion payment for the partnership work, a figure that would rank among the largest termination fees ever recorded.
The deal comes as Cursor has emerged as one of Silicon Valley’s fastest-growing companies since its 2022 launch, having achieved a $29 billion valuation by November. Musk is pursuing the acquisition to help close the gap with competitors in the AI sector, as rivals including OpenAI and Anthropic have developed models that have surpassed those created by his xAI laboratory.
Musk established xAI in 2023 specifically to challenge OpenAI and Anthropic, and subsequently merged his AI company with SpaceX, which is preparing for what could be a historic IPO this summer. The billionaire has engaged in extensive dealmaking over the past year, consolidating portions of his varied business portfolio into one organization covering space exploration, infrastructure, social media, and artificial intelligence.
In March of last year, Musk combined his social media platform X with xAI through an all-stock transaction, before folding both into SpaceX this February in a deal that valued the combined organization at $1.25 trillion. This series of transactions, including the Cursor arrangement, presents additional complexity for public market investors and underwriters evaluating the group’s overall worth.
SpaceX’s upcoming IPO is anticipated to value the company at $1.75 trillion, which would make it the largest initial public offering in history. However, the integration of xAI has made SpaceX’s financial situation more complicated. According to an individual familiar with the company’s finances, the AI laboratory recorded losses of $6.4 billion in 2025, a significant increase from $1.56 billion in 2024. The same source indicated that Starlink, SpaceX’s satellite internet division, generated operating profit of $4.42 billion last year, up from $2 billion in 2024. Musk has reportedly proposed retaining control of the entire organization through special voting shares.
SpaceX stated that acquiring Cursor would provide it with a leading product and distribution channel reaching expert software engineers. Cursor plans to utilize SpaceX’s substantial computing infrastructure to advance its own coding model, Composer, which debuted late last year.
Oskar Schulz, president of Anysphere, said: “We think SpaceX is basically the best company in the world when it comes to building out compute. The feats they have been able to pull off are extraordinary.”
Cursor’s annualized revenue exceeded $2 billion earlier this year, driven by tools aimed at boosting software engineer productivity. The company’s products rely on AI models from OpenAI, Anthropic, xAI, and Google. Cursor has faced increasing competitive pressure as these major AI laboratories have quickly introduced their own coding models, including OpenAI’s Codex and Anthropic’s Claude Code.
Cursor may present national security concerns, especially when working with SpaceX. Peports emerged last month that the latest version of its Composer model was built upon an open-source model from Chinese start-up Moonshot AI.
Wynton Hall has written Code Red: The Left, the Right, China, and the Race to Control AI, to serve as the definitive guide on how the MAGA movement can create positions on AI that benefit humanity without handing control of our nation to the leftists of Silicon Valley or allowing the Chinese to take over the world. This blueprint becomes even more vital as major players like Elon Musk consolidate the rapidly growing AI industry.
Senator Marsha Blackburn (R-TN), who was named one of TIME’s 100 Most Influential People in AI, praised CODE RED as a “must-read.” She added: “Few understand our conservative fight against Big Tech as Hall does,” making him “uniquely qualified to examine how we can best utilize AI’s enormous potential, while ensuring it does not exploit kids, creators, and conservatives.” Award-winning investigative journalist and Public founder Michael Shellenberger calls CODE RED “illuminating,” ”alarming,” and describes the book as “an essential conversation-starter for those hoping to subvert Big Tech’s autocratic plans before it’s too late.”
Read more at the Financial Times here.
Lucas Nolan is a reporter for Breitbart News covering issues of AI, free speech, and online censorship.
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