SpaceX Cursor Deal: $60B Buy Option, $10B Partnership Alternative

SpaceX and AI coding startup Cursor struck a deal granting SpaceX a $60B buy option or a $10B partnership fee. The Silicon Review reports on the tie-up that could reshape AI developer tools.

SpaceX has struck a landmark deal with AI coding startup Cursor, securing the right to acquire the company later this year for $60 billion or, alternatively, pay $10 billion to formalize a strategic partnership, the company announced on X Tuesday .

The agreement grants SpaceX a call option on Cursor, one of the fastest-growing AI developer tools. If SpaceX chooses not to exercise the acquisition right by year-end, it must pay a $10 billion "partnership fee."  The structure allows SpaceX to lock in Cursor without triggering a full merger before its planned IPO.

SpaceX is targeting a public debut as soon as June 2026, aiming for a valuation of $1.75 trillion to $2 trillion in what could be the largest IPO in history. A $60 billion acquisition would require updating financial disclosures and likely delay the offering making the $10 billion "breakup fee" a strategic price to preserve the IPO timeline.

The two companies will jointly develop "the world's best programming and knowledge work AI," combining Cursor's software engineering reach with SpaceX's Colossus supercomputer, which the company claims offers compute power equivalent to 1 million Nvidia H100 chips.

For Cursor, the SpaceX Cursor Deal solves a critical bottleneck. The startup has grown at a breathtaking pace ARR surged from $1 billion in early 2025 to $20 billion in early 2026, with over half of Fortune 500 companies using its product. But Cursor has lacked the massive computing infrastructure needed to train advanced AI models, remaining dependent on OpenAI and Anthropic for underlying capabilities. Access to SpaceX's Colossus cluster could break that dependency.

The startup was founded in 2022 by four MIT graduates. Its valuation skyrocketed from $4 billion in early 2024 to $293 billion by late 2025. Just days before the SpaceX deal, Cursor was reportedly raising $2 billion at a $50 billion-plus valuation a round that has now been shelved in favor of the SpaceX partnership.

Cursor President Oskar Schulz expressed enthusiasm about the deal, stating that SpaceX's vast computing resources will allow the startup to scale its model development.

As SpaceX secures a $60 billion buy option on AI coding star Cursor while preparing for a blockbuster IPO, The Silicon Review examines whether the deal represents Musk's most aggressive move yet to close the AI gap with OpenAI and why a $10 billion breakup fee is a price worth paying to keep the IPO on track.

 About the Author

Sashindra Suresh is an experienced writer specializing in artificial intelligence, software development, and emerging technologies. With a strong ability to translate complex technical concepts into clear, engaging insights, she has contributed to a wide range of publications and platforms. Her work focuses on making cutting-edge innovations accessible to both industry professionals and curious readers alike.