Elon Musk's SpaceX just bought AI coding startup Cursor for $60 billion and its stock hit $211 a share

Days after completing the largest initial public offering in stock market history, Elon Musk's SpaceX announced Tuesday it will acquire Cursor, the AI-powered coding assistant developed by San Francisco-based startup Anysphere, in an all-stock deal valued at $60 billion.

The announcement sent SpaceX shares up roughly 16 percent in early trading on Tuesday, extending the stock's post-IPO rally and pushing its market capitalisation past $2.7 trillion, briefly above Amazon, making it the fourth most valuable company in the United States. SPCX is now trading at $211.27 per share, up 56 percent from its $135 offering price on June 12.

SpaceX confirmed the deal in an 8-K filing with the Securities and Exchange Commission and announced it on X, saying: "SpaceX has exercised the option to acquire Cursor in an all-stock transaction with the goal of building the world's most useful AI models." Cursor chief executive Michael Truell said he was excited to partner with the SpaceX team to scale up Composer, Cursor's AI model.

The transaction is all-stock. SpaceX will not use proceeds from its IPO to fund the deal. At closing, each Anysphere share will be converted into SpaceX Class A common stock at a price equal to the volume-weighted average closing price of SPCX over a specified period. The deal is expected to close in the third quarter of 2026, subject to regulatory approval.

The acquisition had been structured in advance. In April, before SpaceX filed its IPO prospectus, the two companies reached an agreement giving SpaceX the option to either pay approximately $10 billion for a strategic partnership with Cursor or acquire the company outright for $60 billion. SpaceX exercised the acquisition option on Tuesday.

What SpaceX is buying

Cursor is one of the most widely used AI coding tools in enterprise software development. The platform, built by Anysphere, founded in 2022 by Michael Truell and a small team of MIT graduates, uses large language models to help software engineers write, review and debug code. At the time of the SpaceX deal, Cursor was generating approximately $2.6 billion in annualised business-to-business revenue, a figure that reflects how deeply AI coding tools have embedded themselves into enterprise software workflows.

The company has raised $3.4 billion in total from investors including Andreessen Horowitz, Thrive Capital, Accel and Coatue. Its most recent private valuation, established in a $900 million Series C in June 2025 and a further $2.3 billion raise later that year, placed it at approximately $29.3 billion before the SpaceX offer emerged. Before SpaceX came knocking, Cursor was in discussions to raise $2 billion from Andreessen Horowitz, Thrive and Nvidia at a valuation approaching $50 billion.

Cursor's growth has been rapid but its market share has been slipping. Spending data from Ramp showed its share of AI coding tool expenditure among enterprise customers fell from 41 percent in June 2025 to approximately 26 percent in May 2026, as rivals including GitHub Copilot and Amazon Q gained ground. One source told TechCrunch that the $2 billion Cursor was raising would not have been enough to help it break even, suggesting the SpaceX deal resolved a capital constraint at precisely the moment the competitive environment was tightening.

The AI ambition and the talent play

The Cursor acquisition is about more than a coding tool. SpaceX's IPO prospectus described a total addressable market of $28 trillion, of which $26 trillion was attributed to AI, citing a $2.4 trillion AI infrastructure opportunity and a $22.7 trillion enterprise applications market as primary targets.

SpaceX's AI division is built around xAI, Musk's AI company, which merged with SpaceX in February 2026. The division has been in the midst of a restructuring following significant controversies, including allowing users to generate non-consensual deepfakes of women and children through Grok's image generator and the departure of all eleven of xAI's co-founders by the end of March 2026. SpaceX had already begun acquiring Cursor's talent before the formal deal: Reuters reported in March that xAI had hired two engineers from Cursor before the April partnership was even announced.

Industry observers have framed the acquisition partly as a talent play. Peter Swimm, a former principal product manager at Microsoft Copilot Studio, told The New Stack that what remains genuinely scarce in the AI industry is elite engineering talent and the teams that know how to build AI systems at scale. "The more interesting lens is to view it as an acqui-hire and talent consolidation play," Swimm said. "The AI coding assistant market is crowded, features are converging rapidly, and long-term differentiation is proving difficult. What remains genuinely scarce is elite AI engineering talent and the teams that know how to build these systems at scale."

The two companies have also already been working together technically. SpaceX confirmed in the deal announcement that it has been jointly training a model with Cursor for the past several months, using xAI's Colossus supercomputing infrastructure in Memphis, Tennessee. That model is expected to ship inside both Cursor and Grok Build, xAI's AI coding agent, in the near term.

What it means commercially

Billionaire investor Bill Ackman put the financial logic of the all-stock deal directly on X. "One of the things that makes SpaceX so valuable is how valuable it is. The Cursor acquisition costs materially less in dilution because of SpaceX's high valuation," he said. At $60 billion, the acquisition represents approximately 3.4 percent dilution at SpaceX's IPO valuation of $1.77 trillion. At Tuesday's $2.7 trillion market cap, the dilution is smaller still.

Cursor's $2.6 billion in annualised revenue and its deep penetration into enterprise software development teams gives SpaceX a commercial AI business with real revenue at a moment when its own AI division has been rebuilding. Swimm said access to developer workflows is where the real strategic value lies. "Whoever owns the interface where developers spend eight hours a day gains visibility into how software gets built, which models get adopted, and ultimately where AI spending flows," he said.

The Cursor deal is the largest acquisition of a venture-backed startup in 2026 so far, according to Crunchbase. Anysphere's investors, who backed the company from zero to $3.4 billion raised in four years, will receive SpaceX stock at a valuation representing a multiple of between two and three times the company's most recent private valuation of $29.3 billion.