SpaceX said Tuesday it has secured the right to buy artificial-intelligence coding startup Cursor for $60 billion later this year, and committed to pay $10 billion if the acquisition does not close. Elon Musk's rocket company disclosed the arrangement in a post on X that pre-empted a New York Times report pegging the purchase price at $50 billion, which the Times revised after the SpaceX post.

The structure gives Musk a call option on one of the most valuable private AI companies in the world, and guarantees Cursor a 10-figure payment even if the deal collapses. It also wires Cursor's coding tools into xAI's Colossus training cluster in the months before Musk takes his combined SpaceX, xAI and X empire public in what is expected to be a record initial offering.

The terms

"SpaceXAI and @cursor_ai are now working closely together to create the world's best coding and knowledge work AI," SpaceX wrote on X, according to CNBC. The company said the combination of Cursor's product with "SpaceX's million H100 equivalent Colossus training supercomputer" would let the two build "the world's most useful models."

Cursor Chief Executive Michael Truell posted that he was "Excited to partner with the SpaceX team to scale up Composer," the startup's in-house AI model, calling the tie-up "A meaningful step on our path to build the best place to code with AI."

The $60 billion option sits above the roughly $50 billion valuation at which Cursor is raising $2 billion in new funding, a round CNBC reported is being co-led by Andreessen Horowitz, with Nvidia and Thrive Capital also expected to participate. Andreessen and Nvidia were also backers of xAI.

Why Musk is buying

Cursor's developer tools would plug a hole in an xAI product lineup that trails OpenAI's Codex and Anthropic's Claude in the coding market, the segment many AI investors treat as the clearest near-term revenue engine. The Verge, citing The Information, reported that Google co-founder Sergey Brin has directed a company "strike team" to close the gap on agentic coding, and that Sam Altman declared a "code red" at OpenAI last year before shutting down Sora to focus on ChatGPT and Codex.

Musk merged SpaceX with xAI in February at a combined valuation he put at $1.25 trillion, and used xAI stock to acquire X, formerly Twitter, in an all-stock deal announced in March 2025. SpaceX said recently it hired two Cursor programmers, Andrew Milich and Jason Ginsberg.

The $10 billion floor

Break fees are standard in large acquisitions, but The Verge noted that the size and framing of this one are not. SpaceX described the $10 billion payment as compensation "for our work together" rather than as a termination penalty. The announcement arrives less than a week before the scheduled start of Musk v. Altman, the lawsuit between Musk and the OpenAI chief executive whose company was an early investor in Cursor.

SpaceX and Cursor did not immediately respond to requests for comment from CNBC, and neither detailed the option's exercise window beyond "later this year." No left- or right-leaning outlets had produced independent reporting on the terms by press time.

Musk intends to take the combined SpaceX-xAI-X entity public, a listing that would force a disclosed valuation on any Cursor stake exercised before the offering.