Elon Musk's SpaceX dropped another piece on the chessboard. On Tuesday, SpaceX disclosed it signed an option agreement with AI coding startup Cursor, giving it two choices: a full acquisition by late 2026 at a price tag of $60 billion, or a $10 billion breakup fee to terminate the deal.
Cursor's Peak Valuation: Raising $2B at $50B+
The deal comes amid Cursor's fundraising frenzy. CNBC reported that Cursor is in talks to raise $2 billion at a valuation exceeding $50 billion, led by Andreessen Horowitz, with Nvidia and Thrive Capital joining. Coincidentally, Andreessen and Nvidia are also investors in xAI.
xAI Absorbs Cursor Talent, Merger Valued at $1.25 Trillion
In February, Musk completed a larger consolidation: merging SpaceX with his AI startup xAI, creating a combined entity valued at $1.25 trillion, with plans for an IPO that could be the largest ever. Post-merger, several xAI co-founders have departed. SpaceX has quietly hired two senior Cursor engineers — Andrew Milich and Jason Ginsberg — signaling deeper talent integration in AI coding.
AI Coding Battle Heats Up: Musk's $60B Bet
AI coding tools have become a battleground for tech giants in 2025-2026. OpenAI fields Codex, Anthropic has Claude, and Google integrates Gemini into its developer toolkit. Cursor's developer-centric design has built a sticky engineer community, propelling its valuation from near zero to potentially over $50B. Musk's move, timed after the $1.25T merger and ahead of a historic IPO, underscores his bet: AI coding is the next productivity revolution's infrastructure, and controlling the developer gateway is key.