Elon Musk’s SpaceX has struck a deal allowing it to acquire AI coding platform Cursor for $60 billion later in the year, it announced on Tuesday evening.

The company said on X, the social media platform it owns via its xAI unit, that it is now “working closely” with Cursor to enhance its coding and knowledge work AI. The deal will let Cursor train its models on SpaceX’s Colossus supercomputer cluster, while SpaceX will gain a foothold in the AI code market in which it currently lags behind rivals.

If it does not go through with the acquisition, it will pay Cursor $10 billion “for our work together”, which the Financial Times described as “in effect among the largest termination fees in history.”

Cursor was valued at $29 billion in November and has grown rapidly since its founding in 2022. AI-powered code generation is popular in Silicon Valley, but has been responsible for several high-profile incidents in recent months, including a data leak at Meta and website outages at Amazon.

SpaceX, which acquired Musk’s xAI in February, now combines artificial intelligence, social media, satellite internet and rocketry. It is preparing for an initial public offering (IPO) later in the year and is, according to widespread reporting, aiming for a $1.75 trillion valuation, which would make it the largest in history.

Excerpts from its confidential IPO filing have been reviewed by Reuters, which revealed that the company lost $4.94 billion in 2025, on revenue of $18.67 billion. This was largely driven by a fivefold increase in capital spending, with over half that going to the AI portion of the business.

Starlink, its satellite internet service, was the only profitable segment of the business, generating over $4 billion in profit while taking less than a quarter of capital expenditure.

---