Synopsis
SpaceX is exploring a significant move into AI developer tools by securing an option to acquire code-generation startup Cursor for $60 billion or partner for $10 billion. This push aims to bolster xAI's position in the AI coding market and provide Cursor with enhanced computing power for AI model development.Listen to this article in summarized format
Along with OpenAI and Anthropic, Cursor is one of several Silicon Valley startups that have drawn waves of developers by using artificial intelligence to automate coding, a business where AI companies have found early commercial traction.
The deal could give xAI, the Grok chatbot maker that SpaceX merged with in February, a stronger foothold in the AI coding market where it has so far lagged rivals. It also provides Cursor with more computing capacity to develop AI models.
"The combination of Cursor's leading product and distribution to expert software engineers with SpaceX's million H100 equivalent Colossus training supercomputer will allow us to build the world's most useful models," SpaceX said in an X post on Tuesday.
Colossus is xAI's supercomputer cluster in Memphis, which it has touted as the largest in the world. The company has been spending billions of dollars on AI infrastructure.
The announcement comes ahead of SpaceX's highly anticipated public debut in the coming months, with the company eyeing a valuation of close to $1.75 trillion and a $75 billion fundraise that could go down as the biggest IPO in history.
Two product engineering heads at Cursor, a startup that sells AI models for coding tasks, said in March they joined SpaceX to contribute to the company's lunar projects and xAI, Musk's AI startup that is now part of SpaceX.
Musk welcomed the engineers, Andrew Milich and Jason Ginsberg, saying, "Orbital space centers and mass drivers on the Moon will be incredible."
