SpaceX has announced it will acquire AI coding platform Cursor for an eye-watering $60 billion. The deal is set to close in the third quarter of this year. Following SpaceX’s recent Initial Public Offering (IPO) and the merger of SpaceX with xAI, which led to significant restructuring within xAI, this move signals a major shift in the tech landscape.

Cursor was one of the pioneers, integrating large language models into an Integrated Development Environment (IDE). It is essentially a rebranded version of Visual Studio Code with a heavy emphasis on AI. However, competitors like Anthropic’s Claude Code have since caught up and even surpassed Cursor in market share.

Despite seeing robust revenue growth over the past year, Cursor has struggled to maintain its position. TechCrunch reported that the platform was struggling to break even, which is no small feat for a company valued at such a staggering sum. This acquisition underscores the competitive nature of the AI coding space and SpaceX’s ambitions in this domain.

Earlier this year, the Cursor team highlighted their compute challenges as a growth bottleneck. In response, xAI struck a deal to provide Cursor with access to its computing resources, potentially foreshadowing similar arrangements with other major players like Anthropic and Google. This move also marks an interesting collaboration between xAI and Cursor in training models together, including Grok Build.