On Tuesday, 21 April, SpaceX announced via X that Cursor, an AI startup, has granted SpaceX an option to acquire the company for $60 billion (over 1.9 trillion baht), or alternatively, SpaceX can pay $10 billion to jointly continue developing projects with Cursor.
“SpaceX AI and @cursor_ai are working closely together to create the world’s best AI for coding and AI knowledge,” SpaceX stated in a post on Tuesday.
This acquisition deal aims to strengthen AI capabilities for SpaceX, Elon Musk’s space company, which recently merged with xAI and is preparing for an upcoming IPO to compete in the AI arena with rivals like OpenAI and Anthropic.
According to CNBC reports, OpenAI had previously considered acquiring Cursor before negotiating to buy Windsurf to support Codex, its AI coding assistant, to keep up with key competitor Anthropic's Claude. OpenAI was also an early investor in Cursor.
Additionally, recent reports indicate that Microsoft also considered acquiring Cursor but decided not to proceed, despite trailing several competitors in the AI market, as Microsoft continues to focus on investing in other AI providers and cloud services.
Cursor AI is an AI-powered code editor startup that designs AI software for coding, rapidly gaining popularity in the tech world. Simply put, it is an AI-driven coding program that helps software developers create programs faster by using advanced AI to generate, refactor, debug code, and comprehensively understand the project context.
What makes Cursor interesting is its AI-first approach, functioning as an Integrated Development Environment (IDE) with AI at its core—not just a tool. Developers can prompt or command the AI to generate code easily through chat in natural language, making Cursor distinct from other AI coding tools like GitHub Copilot or Codex.
Key features that make Cursor stand out include the ability for developers to highlight code and have AI instantly edit or answer in real-time, analyze code errors with suggested fixes to reduce debugging time, and an advanced code completion system that goes beyond ordinary autocomplete by predicting multiple lines or even entire functions.
Cursor was founded by Michael Truell, who currently serves as CEO, along with friends during a project while studying at MIT. In 2022, he and three others established Anysphere, an AI coding startup with Cursor as a widely popular tool amid the recent Vibe-Coding trend.
Following news of Cursor granting SpaceX the acquisition option, xAI, an AI company now under SpaceX, has held further talks with both Mistral and Cursor to establish a three-way partnership. Elon Musk is actively pushing xAI to build more alliances to catch up with Anthropic and OpenAI, which have recently pulled ahead in AI coding services and AI agents.
Michael Nicolls, SpaceX executive and xAI chairman, acknowledged earlier this month, “The company is clearly behind competitors and needs to accelerate efforts to catch up.”
Currently, according to CNBC, Cursor is negotiating a $2 billion funding round that would value the company over $50 billion (about 1.6 trillion baht). Reports say Andreessen Horowitz plans to lead the investment, with Nvidia and Thrive Capital also expected to participate.
This agreement emerged late in Cursor’s fundraising process, surprising investors considering joining the round, especially after Cursor recently trained its AI model on xAI’s infrastructure.
Elon Musk hopes that Cursor’s software engineer customer base and expertise in AI coding tools will help xAI catch up and gain an edge over AI rivals, whose models currently outperform those developed by xAI.
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