SpaceX Just Agreed to Acquire This AI Start-Up For $60 Billion

Space Exploration Technologies (NASDAQ:SPCX) is coming off the biggest IPO in history, raising a record $85.7 billion on Feb. 12 as Elon Musk’s SpaceX became a publicly traded company. And now it’s putting some of that money to use.

In a filing with the Securities and Exchange Commission, SpaceX announced that it entered into a formal agreement to purchase the parent company of artificial intelligence start-up Cursor for $60 billion in stock. The acquisition is expected to close in the third quarter.

The all-stock acquisition of the Cursor parent, Anysphere, was expected -- in SpaceX’s prospectus, it disclosed that it entered into a partnership with Cursor in April that included an option to purchase the coding company.

Cursor, based in San Francisco, operates an AI coding tool that generates code through agentic AI. Its software has become popular in many companies, and is used by OpenAI, Datadog, Nvidia, Adobe, and others.

The company launched its tool in 2023 and had topped $1 billion in annualized revenue by the end of 2025.

Cursor previously disclosed its relationship with SpaceX in an April blog post, stating that it sought to accelerate its model training for Composer, its first agentic coding model.

Image source: The Motley Fool.

“We've wanted to push our training efforts much further, but we've been bottlenecked by compute. With this partnership, our team will leverage xAI's Colossus infrastructure to dramatically scale up the intelligence of our models,” the company said in the post.

How does the deal help SpaceX?

From its name, SpaceX looks like a spacefaring company, and you’d be right in that regard. Its rocket business is the most active commercial space business in the world, completing more than 660 missions with reusable rockets, enabling the company to turn missions around quickly and at lower cost. SpaceX also has an important and profitable satellite business, Starlink, that provides mobile connectivity and internet to rural and underserved locations around the world.

But the brightest opportunity for SpaceX is through artificial intelligence. SpaceX acquired another Musk-owned business, xAI, earlier this year, and that part of the business will be largely responsible for building out the company’s AI aspirations. In its prospectus, SpaceX said it had an overall addressable market of $28.5 trillion, with $26.5 trillion of that from AI.

Source: SpaceX

Cursor would give xAI a valuable resource for developing AI code for its Grok large language model, which it created in 2023. SpaceX touted its collaboration with Cursor in its prospectus, calling it “a compelling extension of our strategy to vertically integrate compute infrastructure, models, and applications.”

“We consider software development as a strategically important use case for AI given its combination of high-quality structured data, rapid feedback cycles, and frequent, mission-critical usage. AI-assisted coding workflows generate context-rich, verifiable data that can enhance model training and performance, while also driving sustained inference demand,” SpaceX details in the prospectus.

“The depth of Cursor’s integration with a high-frequency coding workflow generates valuable developer interaction data, including coding generation prompts, iteration cycles, and software architecture decisions. We expect that access to this data will enhance our model training and inference, including with respect to Grok.”

What’s next for SpaceX?

To be sure, the company has a lot of money to spend -- more than it anticipated, even. SpaceX sought to raise $75 billion in its IPO but ended up with $85.7 billion because underwriters exercised their options to purchase additional shares, known as a “greenshoe” overallotment.

That gives it plenty of resources to focus on xAI -- a company that Musk has said “was not built right first time around, so is being rebuilt from the foundations up.” In March, xAI brought two former Cursor executives on board.

Now that it is buying one of the most popular AI coding platforms, SpaceX will be able to move deeper into AI applications and software development, which is an opportunity it believes could be worth trillions.

Patrick Sanders has positions in Nvidia. The Motley Fool has positions in and recommends Adobe, Datadog, and Nvidia. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.