SpaceX to acquire Cursor for $60B in stock, days after blockbuster IPO

SpaceX has agreed to acquire AI coding startup Cursor in a $60 billion all-stock transaction, the company announced Tuesday, days after its blockbuster initial public offering and less than two months after the two firms disclosed a preliminary tie-up agreement. [1] The acquisition is designed to accelerate SpaceX's artificial intelligence division, which was built around xAI, the AI company founded by Elon Musk that SpaceX absorbed in February 2026. [1][4] That division has undergone a restructuring following repeated controversies, including incidents in which users generated non-consensual deepfakes of women and children. [1] SpaceX told investors during its IPO roadshow that it sees an addressable market for AI products worth $26 trillion, a figure roughly equivalent to the entire U.S. gross domestic product. [1] Cursor, developed by parent company Anysphere and led by co-founder and CEO Michael Truell, had been on the verge of closing a $2 billion funding round from Andreessen Horowitz, Thrive, and Nvidia that would have valued the company at $50 billion. [1][5] The startup's earliest institutional backing came from Neo, the San Francisco-based venture capital firm and accelerator founded in 2017 by Ali Partovi. [2][3] As of 2025, Neo managed over $1 billion in assets, according to Forbes. [2] Partovi, an Iranian-American entrepreneur also known for co-founding Code.org and serving as an early advisor at Dropbox, is Neo's CEO. [3] The path to Tuesday's announcement was set in April, when SpaceX disclosed an unusual pre-IPO arrangement: it would either purchase Cursor for $60 billion in stock or pay a $10 billion break-up fee if the transaction collapsed. [1] The deal is expected to close in the third quarter of 2026. [1][2][3] xAI, which now operates as a SpaceX subsidiary, has shifted its focus toward developing virtual assistants after shelving plans for a humanoid AI platform called Macrohard that was intended for integration into a robotic workforce. [4] Its flagship products include the generative AI chatbot Grok and the social network X, which xAI acquired in March 2025. [4]