AI coding platform Cursor has entered a partnership with SpaceX, granting the aerospace company an option to acquire the startup for $60 billion later this year.
The agreement specifies that SpaceX will otherwise pay $10 billion for the joint development work if the acquisition does not occur.
The partnership between the two companies is focused on developing advanced AI models for coding. “With this partnership, our team will leverage xAI’s Colossus infrastructure to dramatically scale up the intelligence of our models,” Cursor said in a statement.
SpaceX, on the other hand, said, “The combination of Cursor’s leading product and distribution to expert software engineers with SpaceX’s million H100 equivalent Colossus training supercomputer will allow us to build the world’s most useful models.”
Colossus is a supercomputing facility located in Memphis, Tennessee, currently recognised as the world’s largest artificial intelligence training cluster.
Initially constructed by xAI in 122 days, the facility is undergoing an expansion to accommodate the computational equivalent of one million graphics processing units. SpaceX recently acquired xAI, bringing Colossus under its direct corporate control.
The Cursor agreement coincides with SpaceX’s preparations for a public market debut. In early April, the company reportedly filed for an initial public offering targeting a $1.75 trillion valuation.
Regulatory filings indicate that SpaceX recorded a consolidated loss of $4.94 billion last year, driven by a sharp increase in capital expenditures for AI infrastructure following the xAI merger.
According to a recent report from CNBC, Cursor is in talks to raise “at least” $2 billion at a $50 billion valuation. This would mark a significant jump from its current $29 billion valuation.
In February, Bloomberg reported that Cursor reached $2 billion in annualised revenue. Another report from TechCrunch stated that Cursor forecasts ending this year with an annualised revenue run rate of more than $6 billion, citing two people familiar with the matter.
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