SpaceX this month completed its largest initial public offering (IPO) in history with a pitch built around rockets and satellites. Days later, the company spent $60 billion on an artificial intelligence coding startup.
SpaceX announced its acquisition of Cursor on Tuesday (June 16), days after its Nasdaq debut on Friday (June 12). The deal follows an April deal that gave SpaceX the right to buy Cursor for $60 billion or pay a breakup fee of $10 billion. The transaction is expected to close in the third quarter of 2026, and Cursor’s parent company, Anysphere, will become a wholly owned subsidiary.
The strategy took shape in February when SpaceX, owned by billionaire Elon Musk, absorbed xAI, the AI research institute also owned by Musk and maker of the Grok chatbot.
CNBC reported on February 3 that the deal would give the combined company a value of $1.25 trillion.
The merger provided SpaceX with computing infrastructure, but not products. Cursor provided what xAI could not. It is a widely adopted AI coding tool, already paid for by a large base of professional software engineers.
cursorrevenue, customers and declining market share
Cursor, which was founded in 2022 by Anysphere, had approximately $2.6 billion in annualized B2B revenue at the time of the deal, with enterprise sales also increasing, Reuters reported on Tuesday. Customers include Adobe, Stripe, Nvidia and more, and CEO Jensen Huang calls it his “favorite enterprise AI service,” TechSpot reported on Tuesday.
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The acquisition came amid a decline in Cursor’s competitive position. Cursor’s share of the AI coding tools market fell from 41% in June 2025 to about 26% in May, CNBC reported on Tuesday, citing spending data from Ramp. Currently, half of the categories are managed by Anthropic.
TechCrunch reported on Tuesday that even the $2 billion funding round that Cursor had raised from Andreessen Horowitz, Nvidia, and Thrive Capital wasn’t enough for the startup to break even. That round didn’t end.
In SpaceX’s case, the price reflects the cost of buying the electrical grid it couldn’t build itself. When SpaceX first announced the deal in April in a post on social platform [AI] model. ”
SpaceXAI and @cursor_ai are now working closely together to create the world’s best coding and knowledge work AI.
By combining Cursor’s core product and distribution to professional software engineers with SpaceX’s 1 million H100-equivalent Colossus training supercomputer,…
— SpaceX (@SpaceX) April 21, 2026
loss and leadership drain With xAIthe gap cursor is filled
The AI division, which SpaceX absorbed through the xAI merger, posted an operating loss of $6.35 billion in 2025 and an additional $2.5 billion in the first quarter of 2026, TechTimes reported on Tuesday.
The xAI division has been involved in similar controversies, including an incident in which Grok generated harmful content, Engadget reported on Tuesday. All 11 of Musk’s xAI co-founders have since left the company.
In March, Musk posted on X that “xAI was not built correctly.” [the] Since it is the first time, it will be rebuilt from the ground up. ”
xAI was not built right from the beginning, so it is being rebuilt from the ground up.
The same thing happened with Tesla.
— Elon Musk (@elonmusk) March 12, 2026
Cursor gives Rebuild what xAI was missing. This is a product with proven traction in the fastest growing segment of AI software.
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