SpaceX Acquires Cursor for $60B in All-Stock Deal

Two months after the definitive agreement on June 16, the largest acquisition of a startup ever recorded has finally closed. AI coding tool Cursor announced on August 14 that it has officially been acquired by SpaceX, completing a process that began in April with a partnership with SpaceXAI to accelerate model training.

389 million SpaceX shares

The deal was all stock. Having cleared regulatory procedures, SpaceX converted all outstanding Cursor common and preferred shares, effective August 14, into 389,289,254 shares of SpaceX Class A common stock — based on an implied Cursor equity value of $60 billion and a per-share price set by the volume-weighted average closing price over the seven trading days before closing. Vested Cursor RSUs converted into a further 1,752,426 Class A shares before tax withholding, while unvested RSUs and options were assumed as roughly 29.1 million SpaceX RSUs and 44.4 million options.

Cursor is now a wholly owned unit inside SpaceX’s AI division, SpaceXAI. The Cursor team joins SpaceXAI to work on Grok and related products including Grok Build, Grok Bot and the Grok API — landing on the third-quarter timeline the companies gave at announcement.

Cursor framed what it gets in one word: compute. Access to the world’s largest GPU fleet, the company said, gives it the capacity to build models that are both more powerful and more economical to run — which translates into better models at lower cost for customers. Grok 4.6, released this Wednesday, is an early look at what the two can build together. SpaceX is building the compute to scale intelligence well past what exists today, and Cursor intends to be one of the places that intelligence gets put to use.

xAI collapsed; Cursor fills the hole

To understand the deal you have to look at what happened inside SpaceX. In February, SpaceX absorbed Elon Musk’s AI company xAI in an all-stock deal valuing SpaceX at $1 trillion and xAI at $250 billion, creating an AI division. The unit began coming apart almost immediately. All eleven xAI co-founders had left by the end of March, and Musk publicly conceded that xAI “was built wrong from the start” and would be rebuilt from the foundation. Grok calling itself “MechaHitler” and permitting deepfake generation produced a string of legal disputes. By May, xAI ceased to exist as a standalone company, folded into a SpaceX division called SpaceXAI.

SpaceX needed a team to fill that hole, and chose to buy one. The option contract disclosed in April was unusual: acquire at $60 billion, or pay a $10 billion breakup fee if the deal fell apart. After SpaceX’s June 12 Nasdaq debut sent the stock from a $135 offering price past $200 within three days, it exercised four days later. The equity created by the listing became the currency for the purchase.

Cursor’s growth justified the price tag. Founded in 2022 by four MIT alumni, the company went from $100 million ARR in January 2025 to $500 million by June and $1 billion by year end, crossed $2 billion this February and reached roughly $4 billion by June — about $2.6 billion of it from enterprise customers. Three years of work.

From writing code to running it

A day before the deal closed, on August 13, Cursor announced another acquisition: the team behind Firetiger, which builds agents for software once it reaches production. Those agents monitor rollouts, catch regressions, investigate incidents and hand what they find back to coding agents. Firetiger was founded in 2024 by Rustam Lalkaka and Achille Roussel, who helped build and operate some of the largest production systems on the internet at Cloudflare, Twitch, Segment and Twilio.

The reasoning is straightforward. Coding agents have made generating and shipping code far easier, but much of software engineering happens after the code is written — getting changes safely into production, then understanding and fixing what goes wrong there. An agent that writes code should also know whether that code works in production, and today those systems are largely separate. Firetiger’s technology will appear across Cursor, alongside Cursor Origin, the Git forge built for the agentic era, and Change Monitors, which watches deployed changes and flags problems as they surface.

Origin was unveiled on June 16 at Cursor’s Compile conference. It is code hosting and review in the vein of GitHub, except its primary users are assumed to be agents rather than people. It is designed for dozens of agents pushing branches in parallel, and was demoed handling 22.6 commits per second in a single repository. Its stacked pull requests and merge queues are the specialty of Graphite, which Cursor bought last December for a reported figure above $290 million. Origin is on a waitlist for a fall release.

Line up the acquisitions and the direction is legible: code completion tool Supermaven in November 2024, Koala’s team last July, code review with Graphite in December, production operations with Firetiger this month. Cursor started as a tool for writing code and has been buying its way across every remaining stage of software development.

The competition

This is no longer a developer-tools race. Microsoft-owned GitHub’s Copilot commands tens of millions of developers, while Anthropic‘s Claude Code and OpenAI‘s Codex represent model builders pushing coding tools down from above. Cursor putting SpaceX compute behind it is, ultimately, about competing at that altitude.

Cognition, maker of autonomous software engineer Devin, raised over $1 billion at a $26 billion valuation in May and passed $500 million in annual revenue. On the non-developer vibe coding side, Lovable raised $400 million on August 12 at a $13.3 billion valuation. And in the verification layer, CodeRabbit raised $143 million at a $1.5 billion valuation this week on the pitch of an independent layer that validates code no matter which model produced it — a direct contrast to Cursor absorbing review by buying Graphite.