SpaceX locks in $60bn deal with Pakistani co-founded AI startup Cursor to power AI coding push

SpaceX is buying Anysphere, the company behind the popular AI coding agent Cursor, for $60 billion in an all-stock deal to boost its presence in the lucrative enterprise AI tools market.

In April this year, SpaceX said it had secured an option to either acquire Cursor, an AI code-generation startup co-founded by Pakistani-born Sualeh Asif, for $60 billion or pay $10 billion for their new partnership.

The acquisition, announced on Tuesday, comes days after Elon Musk took the rockets-to-AI company public in a blockbuster Nasdaq debut that valued it at more than $2 trillion.

Buying the startup could give xAI, the Grok chatbot maker SpaceX merged with in February, a stronger foothold in AI coding, one of the first areas where companies have turned AI into real revenue from businesses. The AI push is also a critical component to the $28.5 trillion addressable market SpaceX had pitched to investors.

Cursor is one of several Silicon Valley startups that have drawn waves of developers by using AI to automate coding, making it a key competitor to current market leaders Anthropic and OpenAI. But the company has highlighted that a lack of access to computing power has hampered its growth.

SpaceX had been eyeing Cursor for months. It unveiled in April an option to either buy the San Francisco-based firm for $60 billion later this year, or pay $10 billion for a partnership.

Cursor will be paid in stock under the deal, a regulatory filing showed, and will not use proceeds from SpaceX’s IPO. The transaction is expected to close in the third quarter of 2026.

SpaceX’s shares were up nearly 10% in premarket trading, on track to add about $247 billion to its market capitalisation of $2.53 trillion. At $211.27, the stock has climbed more than 56% from its IPO price of $135.

If the gains hold, SpaceX is set to overtake Amazon in market value to become the fifth-largest company.

High-profile backers, rapid growth

Cursor’s business has scaled rapidly since its founding in 2022, with roughly $2.6 billion in annualised business-to-business revenue and enterprise sales growing sharply, according to company data shared with Reuters earlier this month.

Backed by some of the most prominent Silicon Valley venture capital names including Andreessen Horowitz and Thrive, as well as Nvidia and Alphabet’s Google, Cursor had reportedly been in talks earlier this year for a funding round valuing it at $50 billion.

If Tuesday’s deal is ended under specific circumstances, SpaceX will pay a termination fee of $10 billion, according to the regulatory filing.

The filing also said SpaceX will pay a “regulatory” termination fee of $4 billion if the deal falls through due to antitrust issues.

It was not immediately clear if the deal would affect SpaceX’s agreements to rent out its data centers.

The company has in recent weeks struck deals with Anthropic and Google to lease cloud computing capacity worth roughly $26 billion combined on an annual basis.

Both deals include 90-day termination clauses, meaning SpaceX could quickly reclaim computing capacity if needed.

Who is Sualeh Asif?

According to Forbes, Sualeh Asif, originally from Karachi, cofounded Cursor with three friends from Massachusetts Institute of Technology (MIT).

Asif, boosting a net worth of $1.3 billion, represented Pakistan in the International Math Olympiad from 2016 to 2018.

As per the report, Cursor reached a $29.3 billion valuation in November 2025, after raising $2.3 billion. The startup claims to have more than $1 billion in annualised revenue.