Elon Musk’s SpaceX announced Wednesday that it has partnered with coding platform Cursor to develop new types of AI. As part of the deal, Cursor has given SpaceX the right to acquire the company later this year for $60 billion or to pay $10 billion for their work together.
SpaceXAI and @cursor_ai now they work closely together to create the world’s best coding and knowledge AI.
The combination of Cursor’s leading product and the deployment of professional software engineers with SpaceX’s one million H100 equivalent Colossus supercomputer training will…– SpaceX (@SpaceX) April 21, 2026
Cursor said in a blog post that his work was “computer-bottlenecked,” meaning he couldn’t develop more advanced models due to a lack of the necessary hardware and computing power. SpaceX’s Colossus supercomputer, a data center-like complex in Memphis, Tennessee, is the solution, the two companies agreed. SpaceX said the supercomputer has the equivalent of a million H100 Nvidia chips, one of the most popular GPUs in AI development.
The agreement highlights the growing role of agent coding tools beyond software companies and developers. The potential acquisition also raises the possibility that Cursor could bring agent coding capabilities to xAI’s Grok, a significant gap in its current offering compared to popular rivals such as Anthropic and OpenAI.
Here’s what you need to know about the deal.
What is a Cursor?
Cursor is an AI coding platform aimed at helping software developers and vibe code enthusiasts alike. Composer’s coding model, Cursor, is active. That means it can automatically write code and run tasks.
Nvidia CEO Jensen Huang called Cursor his “favorite business AI tool” in an October interview. The AI industry is changing, and the vision of a great leader like Huang is not just free marketing — it controls funding, directs research, shapes public opinion and ultimately determines whether the company succeeds. A new partnership with SpaceX is likely to help solidify Cursor as a household name.
These types of AI coding tools, such as Anthropic’s Claude Code and OpenAI’s Codex, have become more popular this year due to their ability to create things with AI, as opposed to a chatbot that provides feedback based on existing information. They have also sparked much debate and concern about the future of the software business as AIs become increasingly capable of helping real people.
How does Cursor fit into SpaceX and xAI?
SpaceX and Cursor’s partnership is soon about acquiring resources to create more advanced AI models, with the ultimate goal of creating “the best AI coding and experience.” That can certainly be used in SpaceX’s rocket launches, but the scale of its business means that AI can be used in a variety of ways.
SpaceX and Cursor did not immediately respond to requests for additional comment.
Elon Musk has talked extensively about turning X (formerly Twitter) into his dream app, similar to China’s WeChat, which does social networking, payments, messaging and more. While X is still a strong social media app, with the massive capacity of Grok AI, he built a mega-congolmerate of companies under the X name.
In February, SpaceX merged with xAI. That deal brought SpaceX’s rocket business, Starlink satellites, X social media and xAI’s Grok chatbot under one parent company. Tesla is not included.
Starlink’s giant satellite will launch new internet speeds.
The Grok AI chatbot is probably best known now for creating non-consensual AI sex images, which sparked outrage and investigative questions earlier this year. Adding Cursor to SpaceX and, in theory, the xAI business could strengthen its appeal to enterprise customers looking for professional coding technology.
The merger would bolster SpaceX’s expected summer IPO, which would take the company public and allow people to buy shares of stock. Early estimates say SpaceX could have the largest IPO ever, valued at $1.75 trillion. Musk has a financial stake or the ultimate title in each business, so a successful merger and IPO could make the world’s richest man even richer.
There is no guarantee that SpaceX will buy Cursor at the end of its contract. Bloomberg reported that the structure of the Cursor deal is partly because a direct acquisition could now complicate the planned IPO — already a filing and paperwork nightmare.
Musk is also a notorious businessman, changing his mind and direction many times before deals are officially sealed. His acquisition of Twitter was a long, drawn-out saga, in which he tried to withdraw from his purchase before he took over and quickly changed the platform.
