SpaceX has announced its first major acquisition after a record-breaking IPO.
Elon Musk’s rocket company said on Tuesday that it is buying the AI coding startup Cursor for $60 billion, after the two companies struck a deal earlier this year.
The deal caps Cursor’s rapid ascent to become one of Silicon Valley’s fastest-growing startups and is a validation of the soaring interest in AI-assisted coding.
This week, Business Insider profiled Michael Truell, the 25-year-old Cursor cofounder and CEO, who told employees the potential merger with SpaceX was “a big risk, or a big bet, that we’re making.”
Meet Michael Truell, the 25-year-old Cursor cofounder who just sold his company to SpaceX for $60 billion.
Founded in 2022 by Truell and three others who met at MIT, Cursor has ridden a wave of popularity for AI coding tools, which have dramatically shaken up the software industry over the past year by making coding more productive and accessible.
Cursor’s tools have been adopted by millions of developers, and the company announced in November that annualized revenue had multiplied by 10 in less than a year to over $1 billion.
The partnership SpaceX struck with Cursor in April 2026, which was first reported by Business Insider and saw the two companies collaborate on compute and AI training, gave SpaceX the option to buy the AI coding firm for $60 billion or pay $10 billion for their work together.
Cursor is SpaceX’s first big post-IPO move
The Cursor purchase comes days after SpaceX raised a record-breaking $85 billion in the largest IPO in history.
The company’s valuation has continued to rise in the days after it started trading and closed at a $2.5 trillion on Monday, just below Amazon and above Meta and Tesla.
Despite this, SpaceX continues to play catch-up on AI. Grok, the AI model developed by Musk’s AI startup xAI before it merged with SpaceX in February, continues to lag behind models built by Anthropic, OpenAI, and Google, especially in coding.
Cursor was bought onboard to help improve Grok in April, as part of a radical shake-up at xAI that saw a string of cofounders and engineers leave.
In recent months, Musk has posted on X that new versions of Grok have improved performance after being trained on “a lot” of Cursor data.
