Musk’s SpaceX Eyes $60B Grab for AI Coder Cursor as Tech Race Heats up

AP, Fortune, and Business Insider contributed to this report.

SpaceX is lining up a bold move in the AI arms race – and it’s got a price tag to match.

The company says it has secured the option to buy coding startup Cursor for a hefty $60 billion later this year. If that doesn’t happen, there’s a fallback: a $10 billion partnership to work together instead.

The announcement dropped Tuesday on X, part of the growing bundle of businesses orbiting Elon Musk’s expanding empire, which now blends rockets, AI, and social media into one increasingly tangled operation.

Cursor, built by startup Anysphere, has quickly become a favorite among developers. Its appeal is simple – powerful AI baked directly into the coding process, not just tacked on. That reach into the engineering community is a big reason SpaceX is interested.

There’s also the infrastructure angle. Cursor says teaming up with SpaceX’s AI arm, xAI, gives it access to Colossus, a massive data center in Tennessee packed with computing firepower. The company has been hitting limits on how far it can train its models. That bottleneck might be about to disappear.

Behind the scenes, this is about positioning. SpaceX wants a stronger foothold against rivals like OpenAI and Anthropic, both of which are pushing hard into coding tools. Cursor already competes with products like Codex and Claude Code, though it has leaned on those same players for underlying tech.

The startup itself is barely four years old. Founded by a group of MIT classmates, it rode the wave of “vibe coding” – a term that caught on as AI tools began doing more of the heavy lifting in programming. Investors piled in fast. By late 2025, Cursor was valued at nearly $30 billion.

Its client list reads like a Silicon Valley roll call: Nvidia, Stripe, Salesforce, and more. Even Nvidia’s CEO has publicly backed the tool, saying all of the company’s engineers use it.

Still, the shine isn’t flawless. Some developers have drifted toward newer tools from Anthropic, citing lower costs and better performance. Cursor has been racing to keep up, rolling out updates that push toward more autonomous AI coding agents.

For SpaceX, the timing matters. The company is preparing for a potential IPO and stacking up AI capabilities wherever it can. Folding in a widely used developer tool – or even locking in a deep partnership – could give it an edge where it counts: talent, users, and data.

Whether that turns into a full $60 billion acquisition or a scaled-down collaboration, one thing’s clear. The fight over who builds the future of coding just got a lot more expensive.