SpaceX announced this week that it has secured an option to acquire AI coding startup Cursor for $60 billion, or pay $10 billion for the work they’re doing together if it doesn’t end up acquiring the company. The agreement gives Cursor access to SpaceX’s Colossus supercomputer and a path to reducing its dependence on Anthropic and OpenAI, whose models currently power much of Cursor’s product and whose fees have weighed heavily on its margins.
The timing of the SpaceX deal is interesting. Just a few weeks earlier, Cursor had been quietly attempting to raise billions in private markets, but had encountered a lack of interest from late-stage investors like Iconiq, many of whom had just deployed capital into OpenAI and Anthropic and weren’t ready to back a competitor at a $50 billion valuation. Cursor’s gross margins were negative 23% as of January, an unusual position for a company generating $2.7 billion in annualized revenue. The company ultimately lined up $2 billion from Nvidia, a16z, and Thrive before canceling the round following after the deal with SpaceX was announced.
The Cursor deal complicates an already complicated financial picture for SpaceX ahead of its June IPO. Reuters reported this week that SpaceX took out a $20 billion bridge loan last month to refinance debt tied to X and xAI, reducing total debt from $22 billion to $20 billion, with repayment potentially contingent on IPO proceeds. xAI spent $12.7 billion in capital expenditures last year while generating only $3.2 billion in revenue. Cursor lost nearly $900 million in its last fiscal year. This may indicate that SpaceX is using its IPO momentum to paper over a collection of cash-hungry businesses before public market investors get a full look at the S-1.
