The all-stock acquisition concludes an agreement the two announced in April.
SpaceX has agreed to buy AI startup Cursor for $60 billion in stock, concluding a deal that was first announced earlier this year. In April, the two companies signed a partnership that saw SpaceX agree to either invest $10 billion into Cursor or buy it outright for $60 billion. Now, less than two months later, the two are moving forward with an acquisition, which SpaceX expects to close later this year.
Cursor is known for its AI coding tool of the same name. As recently as April, the company was reportedly in talks to raise approximately $2 billion in new funding from Andreessen Horowitz, NVIDIA and other investors. However, * TechCrunch* reports that even had Cursor secured that funding, it wouldn't have been enough for it to break even. That's despite the company raising $2.3 billion last year.
As for SpaceX, Cursor represents a way for it to shore up its xAI division. As you might recall, SpaceX bought Elon Musk's AI lab in February, which itself merged with X (formerly Twitter) last year. But despite being the centerpiece of SpaceX's IPO pitch to investors, the division has been mired in controversy. In July of last year, Grok, xAI's chatbot, briefly took a hard turn toward antisemitism when it called itself MechaHitler in response to some user prompts. More recently, xAI allowed Grok users to users to generate sexualized images of women and children. In the aftermath of those incidents, all 11 of Musk's xAI co-founders departed the company. Musk has said xAI "was not built right [the] first time around," and that the division is in the process of rebuilding itself from the ground up. Now the world's first trillionaire has bet $60 billion that Cursor can help with that undertaking.