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- SpaceX, which also owns xAI, announced a partnership with coding startup Cursor.
- The partnership gives Cursor access to SpaceX's computing power.
- The announcement comes as SpaceX preps for a potential IPO later this year.
SpaceX announced Tuesday that it has struck a deal with Cursor that would give it the right to buy the coding startup for $60 billion or pay $10 billion for the work it's doing if there's no acquisition.
The partnership with Cursor gives Elon Musk's space company a major foothold in the AI coding race. Cursor gets access to SpaceX's computing resources, including Colossus, a supercomputer powered by 200,000 Nvidia GPUs.
"The combination of Cursor's leading product and distribution to expert software engineers with SpaceX's million H100 equivalent Colossus training supercomputer will allow us to build the world's most useful models," SpaceX said in a statement posted on X. "Cursor has also given SpaceX the right to acquire Cursor later this year for $60 billion or pay $10 billion for our work together."
Cursor co-founder Michael Truell said in an X post: "Excited to partner with the SpaceX team to scale up Composer. A meaningful step on our path to build the best place to code with AI."
SpaceX's partnership with Cursor comes at a pivotal moment for the company. In February, it acquired xAI, Musk's artificial-intelligence startup, broadening the rocket company's scope into AI infrastructure and software. Then in early April, SpaceX confidentially filed for an IPO, setting the stage for a potential public debut for later this year.
Buying Cursor would position SpaceX to compete more directly with frontier AI labs like Anthropic amid a heated race for more capable coding tools and AI agents.
XAI recently underwent shifts in its leadership structure as a slew of high-profile employees, including Musk's 11 original cofounders, left the startup. Musk said at a conference that Grok, xAI's chatbot, "is currently behind in coding."
Last week, Business Insider reported that xAI was planning to provide Cursor with computing power, according to sources familiar with the matter. It hired two former Cursor product engineering leads in March, Andrew Milich and Jason Ginsburg, to oversee the product team; they report directly to Musk and xAI president Michael Nicolls, as Business Insider previously reported.
Cursor, founded in 2022, has emerged as one of the fastest growing AI startups. Last November, the company said in a blogpost that it had reached $1 billion in annual recurring revenue with a team of over 300 employees. At the time, the company said it had completed a series D funding round at a $29.3 billion post-money valuation.
The company has also been pushing to expand beyond code completion. Earlier this year, it released its first agentic coding model, part of a broader effort to build tools that can take on more complex software tasks through agents.
"We've wanted to push our training efforts much further, but we've been bottlenecked by compute," the startup said in a blog, announcing its SpaceX partnership. "With this partnership, our team will leverage xAI's Colossus infrastructure to dramatically scale up the intelligence of our models."