SpaceX is deploying its newly acquired post-IPO capital into the artificial intelligence sector, purchasing coding startup Cursor for $60 billion. Fresh off an $85 billion initial public offering that drove its valuation to $2.5 trillion, the rocket giant is pivoting toward infrastructure software.
Founded in 2022 by Michael Truell and three fellow MIT graduates, Cursor experienced rapid market expansion. The startup announced in November that its annualized revenue multiplied by 10 in less than a year, surpassing $1 billion as millions of developers adopted the platform. Business Insider profiled Truell, who told employees the potential merger was "a big risk, or a big bet, that we're making."
The acquisition stems from an April 2026 partnership focused on compute infrastructure and AI training. As first reported by Business Insider, that initial agreement gave SpaceX the option to buy the coding firm for $60 billion or pay $10 billion for their joint work. SpaceX chose the full buyout to anchor its internal engineering roadmap.
The integration aims to fix performance gaps in Grok, the AI model developed by xAI before it merged into SpaceX in February. Grok has lagged behind rival models from Anthropic and OpenAI, particularly in technical coding tasks. Elon Musk posted that new versions of Grok improved after being trained on a lot of Cursor data.
