SpaceX has agreed a colossal $60 billion (£44.7 billion) deal to acquire Cursor, the AI coding platform, in an all-stock transaction that will see the San Francisco-based startup absorbed into Elon Musk’s aerospace and technology empire.
The acquisition of Anysphere, Inc., Cursor’s parent company, is structured as a stock-for-stock merger in which Cursor’s common and preferred shares will convert into SpaceX Class A common stock. The deal is expected to close in the third quarter of 2026, subject to regulatory approvals, and includes a $10 billion termination fee under certain circumstances, with a further $4 billion fee triggered if antitrust authorities block the takeover.
SpaceX had previously confirmed in April that it was collaborating with Cursor on AI model training and held an option to acquire the company at the same $60 billion valuation — or, alternatively, to pay $10 billion for continued collaborative work. The formal agreement now cements that optionality into a binding purchase.
The rationale, according to SpaceX, is to build “the world’s most useful AI models”. The company sees AI-assisted software development as a strategically important use case because it generates high-quality structured data for model training and drives sustained demand for inference computing. Analysts have noted that SpaceX’s xAI division and its Grok chatbot have lagged behind competitors such as Anthropic and OpenAI, making the acquisition a direct attempt to close that gap.
Record-breaking IPO fuels stock surge
The acquisition news arrived just days after SpaceX’s landmark initial public offering on the Nasdaq in New York on Friday, June 12, 2026. The IPO raised a record $75 billion — rising to $85.7 billion after underwriters exercised their over-allotment option — and valued the company at roughly $1.75 trillion to $1.77 trillion at the offer price of $135 per share.
On its first day of trading, shares opened at $150 and closed at $160.95, a 19 per cent gain, after hitting an intraday high of $176.52. By the close of the first session, SpaceX’s market capitalisation had already surpassed $2 trillion, making it the largest IPO in history.
The momentum has continued into the week. By Tuesday afternoon, SpaceX shares were trading above $210, up from the $150 opening price on Friday. Its market capitalisation reached $2.8 trillion, overtaking Amazon’s $2.67 trillion and briefly topping Microsoft’s $2.93 trillion before settling back. At one point during Tuesday’s session, SpaceX became the fifth most valuable company in the world by market capitalisation.
The IPO cemented Elon Musk’s status as the world’s first paper trillionaire, with his personal fortune estimated at $1.1 trillion. Speaking from Starbase in Texas on the day of the listing, Musk called the achievement “hard to believe”, adding, “If people had told me this was going to happen, I was like, ‘man, you must be smoking some really good crack, because I think this company is going to fail’.” He promised to take humanity “to Mars and ultimately beyond”.
SpaceX’s prospectus identified the sale of business-oriented AI products as the company’s single largest potential market — a move the Cursor acquisition directly supports.
How Cursor’s AI automates code writing
Cursor is an AI-native fork of Microsoft’s Visual Studio Code, redesigned from the ground up to act as a pair programmer and autonomous agent across entire codebases. Instead of requiring developers to manually write every line of code, Cursor’s AI can generate, complete, debug, and refactor code through natural language commands and contextual reasoning.
Key capabilities include multi-file reasoning — the ability to understand and modify code that spans dozens of files simultaneously — repository-wide search that locates functions, classes and variables without manual hunting, and agentic workflows where the AI can plan and execute sequences of edits in response to a single high-level request. Developers can interact with Cursor in plain English, describing what they want the software to do, and the AI produces the corresponding code, complete with error checking and optimisation suggestions.
The platform integrates large language models from multiple providers, including Anthropic and OpenAI, as well as its own proprietary models. This allows Cursor to switch between different AI backends depending on the task, balancing speed, accuracy and cost. Its code completion engine learns from the developer’s own coding patterns and the broader codebase, offering inline suggestions that become more accurate over time.
Cursor was founded in 2022 by four MIT students — Michael Truell, Sualeh Asif, Arvid Lunnemark and Aman Sanger — and has grown at an extraordinary pace. It achieved unicorn status in December 2024 after its Series B round valued the company at $2.5 billion. By November 2025, following a $2.3 billion Series D round co-led by Accel and Coatue Management, it was valued at $29.3 billion. Its annual recurring revenue (ARR) hit $100 million by January 2025 — the fastest any SaaS company has reached that milestone — climbed to $500 million by June 2025, exceeded $1 billion by November 2025, and surpassed $3 billion by early 2026. Projections from the company indicate ARR could reach $6 billion by the end of 2026.
Cursor raised a total of approximately $3.4 billion across multiple funding rounds. Its seed round of $8 million in October 2023 was led by the OpenAI Startup Fund, followed by a $60 million Series A in August 2024 (valuing the firm at $400 million), a $105 million Series B in December 2024, a $900 million Series C in June 2025 led by Thrive Capital, and the November 2025 Series D. In December 2025, Anysphere acquired Graphite, a code review startup.
Cursor had previously attracted acquisition interest from other tech giants. Microsoft considered buying the company but decided against it, while OpenAI rebuffed two separate approaches from Cursor.
AI integration and SpaceX’s wider strategy
SpaceX and Cursor have been jointly training an AI model since early 2026, which is scheduled for release inside both Cursor and Grok. Cursor will also leverage SpaceX’s “Colossus” training supercomputer to scale its models further. SpaceX acquired Elon Musk’s xAI business earlier this year, which had itself merged with X (formerly Twitter) last year. The Grok chatbot has faced controversy over antisemitic responses and the generation of inappropriate imagery, and the Cursor acquisition is seen as a strategic effort to improve Grok’s underlying capabilities.
SpaceX estimates a total addressable market of $28.5 trillion, with approximately 93 per cent of that linked to AI. The company’s strategy involves vertical integration of compute infrastructure, AI models and applications, and the Cursor deal is a direct step in that direction.
SpaceX’s business segments include the rocket company, the social media platform X, and Starlink — which is currently the only profitable part of the group. The company reported a GAAP net loss of $4.9 billion on revenues of $18.7 billion for 2025, and a further loss of $4.28 billion in the first quarter of fiscal 2026. Revenue grew 33 per cent year-on-year, driven largely by Starlink, but heavy investment in AI infrastructure is widening losses.
The IPO’s dual-class share structure will preserve Musk’s voting control. Up to 30 per cent of shares were reserved for retail investors, though analysts have cautioned about potential volatility due to the relatively small public float and high valuation. Historically, large IPOs have underperformed in their first year, with the average stock declining by 33 per cent and experiencing a 50 per cent drawdown. The first 20 per cent of insider shares will become eligible for sale on August 11, 2026, with rolling releases of 7 per cent every few weeks thereafter through October.
“If people had told me this was going to happen, I was like, ‘man, you must be smoking some really good crack, because I think this company is going to fail’,” Musk told the crowd in Texas on Friday.
