According to informed sources, SpaceX, the space exploration company led by Elon Musk, plans to advance its acquisition of artificial intelligence (AI) coding startup Cursor approximately 30 days after completing its public listing. Previous reports indicated that SpaceX could file its initial public offering (IPO) application as early as this Wednesday, with a formal listing on Nasdaq targeted for June 12. If all proceeds according to plan, the acquisition of Cursor is anticipated to be finalized in July.
Sources noted that should the transaction ultimately fail to materialize, SpaceX would be required to pay Cursor a reverse termination fee of $10 billion. It is reported that SpaceX has completed the confidential filing process for its IPO, aiming to raise up to $75 billion with an overall valuation surpassing $200 billion. If successful, this would set a new global record for the largest IPO in history.
The acquisition of Cursor is expected to bolster SpaceX's capabilities in AI-assisted coding. In a high-profile announcement in April, SpaceX stated it had secured the right to acquire the AI coding startup for $60 billion later this year. Alternatively, the companies could collaborate with SpaceX paying $10 billion, a move aimed at helping SpaceX catch up to competitors in the AI coding domain.
SpaceX announced the deal in a post on X, stating the two companies are "now working closely together to build the world's best coding and knowledge work AI." The transaction may still require regulatory approvals. Reports suggest SpaceX did not proceed with an immediate acquisition of Cursor at the time due to the impending IPO.
Prior to announcing the Cursor deal, SpaceX merged with Musk's AI company, xAI. Musk has previously acknowledged that xAI lags behind peers in coding tools and vowed to rebuild the company from the ground up. He has been actively seeking engineering talent and has previously recruited from Cursor.
Cursor's AI assistant, launched in 2023, is designed to help programmers write and debug code more efficiently. As demand for AI coding tools among software developers has surged, Cursor has become one of the fastest-growing startups ever and plays a central role in the tech industry's era of "Vibe Coding." The core concept of "Vibe Coding" involves interacting with AI through natural language to express ideas and requirements, focusing on creativity without the need to manually write or deeply understand underlying code.
On Monday, Cursor released its latest AI coding model, Composer 2.5. The model is partly trained using xAI's data center, Colossus 2. Cursor's CEO, Michael Truell, posted on X, describing the AI model as "the beginning of our collaboration with SpaceX and xAI." He added, "Hopefully more improvements are coming soon."
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