Company SpaceX, owned by Elon Musk, has acquired artificial intelligence startup Cursor for $60 billion to strengthen its competition with OpenAI and Anthropic in the AI programming tools market. This deal, formally agreed upon on Tuesday morning, aims to accelerate the development of Musk’s xAI division and enhance its ability to catch up with competitors such as Anthropic (Claude) and OpenAI (ChatGPT).
The decision to acquire Cursor was made by SpaceX just two trading sessions after its historic debut on the stock market on Friday. SpaceX shares rose by more than 40% in the first two trading sessions. The deal stipulates that Cursor investors will receive SpaceX shares. According to the company, SpaceX has been collaborating with Cursor staff for weeks on training a new artificial intelligence model and developing more advanced AI capabilities.
Growth of the AI Programming Market
The AI assistant from Cursor, launched in 2023, is designed to help programmers write and debug code more efficiently. The startup quickly became one of the fastest-growing companies and is a central player in the era of ‘vibe coding’—programming using AI commands instead of traditional coding. Demand among software developers for tools that can create code based on instructions continues to grow.
Currently, Cursor has over 3,000 clients, each paying at least $100,000 per year for its software. By the end of April, Cursor’s annual revenue reached $3 billion, exceeding $2 billion in February. These annual revenue figures, which are a 12-month sales projection based on the latest results, were previously reported by Bloomberg.
Strategic Advantages and Challenges
The acquisition of Cursor is seen as the best opportunity for xAI to establish itself in the growing AI programming market, despite increasing competition from Anthropic and OpenAI, which are also significantly enhancing their own tools. Integration with SpaceX provides Cursor with substantial computing resources needed to develop and support complex AI tools, including a large stock of chips.
This operation is also expected to help Musk’s company compete in the fierce battle for talent in the field of artificial intelligence. SpaceX’s AI division has faced dozens of layoffs in engineering and data training, as well as difficulties in recruiting high-level specialists. Elon Musk has already involved Starlink employees and Tesla engineers in programming collaborations. The firm owned by Cursor has also assisted leading AI companies, such as OpenAI, with recruitment.
According to the company, Musk’s investments in artificial intelligence have been costly for SpaceX, which last year recorded a net loss of $4.94 billion, retroactively taking on debt from xAI investments. Capital expenditures fueling Musk’s plans nearly doubled last year, reaching $20.7 billion, with the largest single block of SpaceX expenditures allocated to artificial intelligence.
Source: Clarín