SpaceX announced the acquisition of Cursor Tuesday (June 16), days after its Nasdaq debut Friday (June 12). The deal follows an April arrangement giving SpaceX the right to buy Cursor for $60 billion or pay a $10 billion breakup fee. The transaction is expected to close in the third quarter of 2026, with Cursor’s parent company, Anysphere, becoming a wholly owned subsidiary.
The strategy took shape in February, when SpaceX, owned by trillionaire Elon Musk, absorbed xAI, an AI lab also owned by Musk and the maker of the Grok chatbot.
The deal valued the combined entity at $1.25 trillion, CNBC reported Feb. 3.
The merger gave SpaceX the computing infrastructure but not the product. Cursor supplied what xAI couldn’t: a widely adopted AI coding tool with a large base of professional software engineers already paying for it.
Cursor’s Revenue, Customers and Fading Market Share
Cursor, founded in 2022 by Anysphere, carried roughly $2.6 billion in annualized B2B revenue at the time of the deal, with enterprise sales growing, Reuters reported Tuesday. Customers include Adobe, Stripe and Nvidia, whose CEO, Jensen Huang, has called it his “favorite enterprise AI service,” TechSpot reported Tuesday.
The acquisition came as Cursor’s competitive position was slipping. Cursor’s share of the AI coding tool market fell from 41% in June 2025 to about 26% in May, CNBC reported Tuesday, citing spending data from Ramp. Half of the category is now controlled by Anthropic.
Even the $2 billion funding round Cursor had been raising from Andreessen Horowitz, Nvidia and Thrive Capital wasn’t going to be enough for the startup to break even, TechCrunch reported Tuesday. That round did not close.
For SpaceX, the price reflects what it costs to buy distribution it couldn’t build. When SpaceX first announced the April deal in a post on social platform X, also owned by Musk, it framed the combination of Cursor’s product and customer base with its Colossus supercomputer infrastructure in Memphis, Tennessee, as the path to building “the world’s most useful [AI] models.”
Losses and Leadership Exodus at xAI, and the Gap Cursor Fills
The AI segment that SpaceX absorbed through its xAI merger posted a $6.35 billion operating loss in 2025 and burned an additional $2.5 billion in the first quarter of 2026, TechTimes reported Tuesday.
The xAI division has seen its share of controversy, including incidents in which Grok generated harmful content, Engadget reported Tuesday. Afterward, all 11 of Musk’s xAI co-founders left the company.
In March, Musk posted on X that “xAI was not built right [the] first time around, so is being rebuilt from the foundations up.”
Cursor gives the rebuild something xAI lacked: a product with proven traction in the fastest-growing segment of AI software.
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