SpaceX is working with Cursor and has an choice to purchase the startup for $60B

SpaceX mentioned it has struck a cope with Cursor to develop a next-generation “coding and data work AI,” which features a shocking provision — an choice to purchase the favored software program growth platform for $60 billion later this 12 months.

Partnering with and probably buying a frontrunner within the hottest AI product class can solely be seen within the context of SpaceX’s much-anticipated public providing. Buyers looking for extra worth within the IPO may see its engagement with Cursor as one other approach to extract worth from Elon Musk’s more and more sprawling tech conglomerate.

The deal received’t shock those that comply with the business intently. Final week, it was reported that xAI would start renting computing power from its knowledge facilities to Cursor, with the coding startup utilizing tens of hundreds of xAI chips to coach its newest AI mannequin. And final month, two of Cursor’s most senior engineering leaders, Andrew Milich and Jason Ginsberg, left the company to join xAI, the place each report on to Musk.

SpaceX described the partnership as a challenge combining Cursor’s “product and distribution to knowledgeable software program engineers” with SpaceX’s Colossus supercomputer, which the corporate claims has the equal compute energy of one million Nvidia H100 chips.

SpaceX additionally mentioned that at some undisclosed level later this 12 months, it is going to both pay Cursor $10 billion for its work or purchase the corporate for $60 billion. Final week, TechCrunch reported that Cursor was eyeing a $50 billion valuation in an upcoming personal fundraising spherical. That determine itself displays an astonishing collection of leaps. Cursor was valued at simply $2.5 billion in January of final 12 months, climbed to $9 billion by final Could, and was assigned a $29.3 billion post-money valuation when it closed on $2.3 billion in Sequence D funding in November.

Both determine would symbolize a big expense for SpaceX, which is broadly seen to be shedding cash following the acquisition of xAI and the social media community X and is planning in depth capital funding. The temporary assertion didn’t say if both deal could possibly be paid in SpaceX inventory.

Within the meantime, the transfer might shore up weaknesses at every firm, nevertheless it additionally reveals them. Neither Cursor nor xAI has proprietary fashions that may match the main choices from Anthropic and OpenAI — the identical firms now competing instantly with Cursor for the developer market.

Cursor nonetheless makes use of and sells entry to Claude and GPT fashions at the same time as each corporations roll out their very own coding instruments, an ungainly association that this new SpaceX partnership could also be designed to ultimately escape.