SpaceX Secures Option to Buy AI Coding Firm Cursor for $60 Billion Later This Year

SpaceX announced on Tuesday that Cursor, an AI coding company, has granted it the right to acquire the firm later this year for $60 billion. If SpaceX opts not to complete the purchase, it will pay Cursor $10 billion for their joint efforts, according to the announcement posted on X.

The potential deal values Cursor at a level that reflects its swift ascent in the AI sector, with the company's annualized revenue crossing $2 billion in February 2026, as reported by Fortune.

Before the SpaceX announcement, Cursor was in discussions to raise funding at a $50 billion valuation, TechCrunch reported. A year earlier, the company had been in talks for funding at nearly a $10 billion valuation, according to Bloomberg. Cursor raised an initial $60 million funding round in June 2024.

By the end of 2025, it had raised three more funding rounds that brought in $3.3 billion, skyrocketing its valuation from $2.5 billion to $30 billion in a single year.

Cursor hit $100 million in annualized revenue in January 2025, about one year and eight months after launching its first product in early 2023. For comparison, Slack took two and a half years to reach that revenue milestone, while Dropbox required four years.

The company now employs more than 300 people, and 67% of Fortune 500 companies use its technology, according to Fortune. Notable users include Salesforce, Samsung, and Budweiser, as listed on Cursor's website. Cursor functions as a coding assistant with its own integrated development environment, where AI predicts the next code a user might write, enabling faster coding.

Earlier this month, Cursor launched Cursor 3, which enhanced its agentic coding features, allowing AI to write code independently based on broad user instructions. This update positions Cursor to compete with Anthropic's Claude Code, which launched just over a year ago. Cursor's AI tools originated from a pivot into coding assistance after initial ideas failed to gain traction.

Cursor was founded as a college passion project along with MIT classmates. The cofounders were interested in AI before OpenAI launched ChatGPT in 2022.

In 2021, they were considering options like academic work, joining existing AI efforts, or starting their own venture, the CEO said at Y Combinator’s AI Startup School in San Francisco in June 2025. “In 2021 we were trying to figure out what we do with that interest,” he stated.

“Do we go and work on AI in academia? Or … do we go join, you know, a big existing AI effort? ” By 2022, after Microsoft’s GitHub Copilot launched for individual developers, the cofounders decided to launch their own AI project. Initially, they targeted a copilot for mechanical engineers, viewing it as a niche, uncompetitive area, the CEO explained at the Y Combinator event.

“At first, the cofounders focused on what [the CEO] described as a ‘copilot for mechanical engineers’ partly because it would be a niche space that was ‘sleepy and uncompetitive,’” he said. The team avoided AI coding at first due to perceived competition, the CEO noted at the Y Combinator interview. But after six months, with early ideas failing to launch, they pivoted to AI coding.

“We realized we were really inherently excited about the future of coding,” the CEO said during the Y Combinator interview.