SpaceX preempts $2 billion Cursor fundraise with buyout offer

SpaceX has moved to preempt a $2 billion funding round for AI coding startup Cursor with a $60 billion buyout offer. According to a person familiar with the matter, Cursor was on track to close the $2 billion funding round later this week, which would have valued the startup at $50 billion. Cursor was apparently running a parallel process, negotiating the potential acquisition with SpaceX while simultaneously finalizing the private funding round with investors including Andreessen Horowitz, Thrive, Nvidia, and Battery Ventures. While many private companies prefer to remain independent, the planned $2 billion raise would have fallen short of the capital needed to reach cash-flow breakeven, likely forcing the company to raise substantial funding later.

The proposed transaction structures the deal through several key financial components:

• A $60 billion buyout offer from SpaceX to acquire Cursor.
• A $50 billion valuation that Cursor was on track to secure in its private funding round.
• A $10 billion collaboration payment that SpaceX will pay to Cursor to collaborate on AI development.
• A planned $2 billion funding round that was preempted by the buyout offer.

The move comes as SpaceX, which recently merged with xAI, aims to bolster its artificial intelligence capabilities to compete with industry leaders like Anthropic and OpenAI. Acquiring Cursor would give SpaceX a stronger position in AI coding, which is currently the most lucrative application of the technology. While Cursor faces fierce competition from Anthropic’s Claude Code and OpenAI’s Codex, the startup could face challenges in continuing to raise private capital to finance its massive computing needs. Unlike Google’s purchase of Windsurf, which was structured as an acqui-hire—an acquisition structured primarily to hire key individuals—SpaceX would likely keep the entire Cursor team intact because SpaceX currently lacks a meaningful AI workforce.

SpaceX is delaying the potential acquisition of Cursor until after its IPO this summer. This delay is largely because the company wants to avoid updating its confidential financial filings before the listing, making it easier to finance the $60 billion purchase using its new, publicly traded stock. In the interim, SpaceX can offer Cursor access to vast computing capacity at its data centers in Mississippi and Tennessee, potentially in lieu of part of the promised $10 billion collaboration payment. By pursuing the acquisition, SpaceX aims to position itself as an AI company. This positioning could allow the company to secure a higher valuation multiple—a financial metric used to value companies—from Wall Street investors who currently assign premium multiples to AI businesses, rather than being valued solely as a space and satellite enterprise.

Why it matters

SpaceX is attempting to rebrand as an AI-first company to capture higher valuation multiples, using its massive scale to outmaneuver startups like Anthropic and OpenAI in the coding space.