SpaceX is working with Cursor and has an option to buy the startup for $60B

SpaceX stated it has struck a cope with Cursor to develop a next-generation “coding and information work AI,” which features a shocking provision — an choice to purchase the favored software program improvement platform for $60 billion later this 12 months.

Partnering with and probably buying a pacesetter within the hottest AI product class can solely be seen within the context of SpaceX’s much-anticipated public providing. Buyers looking for extra worth within the IPO may see its engagement with Cursor as one other solution to extract worth from Elon Musk’s more and more sprawling tech conglomerate.

The deal gained’t shock those that comply with the business carefully. Final week, it was reported that xAI would start renting computing energy from its information facilities to Cursor, with the coding startup utilizing tens of 1000’s of xAI chips to coach its newest AI mannequin. And final month, two of Cursor’s most senior engineering leaders, Andrew Milich and Jason Ginsberg, left the corporate to hitch xAI, the place each report on to Musk.

SpaceX described the partnership as a challenge combining Cursor’s “product and distribution to professional software program engineers” with SpaceX’s Colossus supercomputer, which the corporate claims has the equal compute energy of one million Nvidia H100 chips.

SpaceX additionally stated that at some undisclosed level later this 12 months, it’ll both pay Cursor $10 billion for its work or purchase the corporate for $60 billion. Final week, Trendster reported that Cursor was eyeing a $50 billion valuation in an upcoming non-public fundraising spherical. That determine itself displays an astonishing collection of leaps. Cursor was valued at simply $2.5 billion in January of final 12 months, climbed to $9 billion by final Might, and was assigned a $29.3 billion post-money valuation when it closed on $2.3 billion in Sequence D funding in November.

Both determine would symbolize a major expense for SpaceX, which is broadly seen to be dropping cash following the acquisition of xAI and the social media community X and is planning intensive capital funding. The transient assertion didn’t say if both deal may very well be paid in SpaceX inventory.

Within the meantime, the transfer may shore up weaknesses at every firm, nevertheless it additionally reveals them. Neither Cursor nor xAI has proprietary fashions that may match the main choices from Anthropic and OpenAI — the identical corporations now competing straight with Cursor for the developer market.

Cursor nonetheless makes use of and sells entry to Claude and GPT fashions at the same time as each corporations roll out their very own coding instruments, an ungainly association that this new SpaceX partnership could also be designed to finally escape.