SpaceX has partnered with Cursor to develop a next-generation AI for coding and knowledge work. The deal includes an option for SpaceX to buy the software development platform for $60 billion later this year or pay Cursor $10 billion for its work on the project.
Cursor's valuation has skyrocketed from $2.5 billion in January 2023 to potentially as high as $50 billion, according to recent reports. This rapid growth reflects a series of significant funding rounds, including a $29.3 billion post-money valuation after raising $2.3 billion in Series D funding last November.
The partnership combines Cursor's expertise with SpaceX's Colossus supercomputer, which has the equivalent compute power of a million Nvidia H100 chips. However, neither Cursor nor xAI (another Musk-led company) have proprietary AI models that match the leading offerings from Anthropic and OpenAI, highlighting their competitive weaknesses in the market.
The deal may be seen as part of SpaceX's efforts to extract value from its much-anticipated public offering. With a planned extensive capital investment, acquiring or investing in Cursor could help shore up weaknesses at both companies, but also raises questions about Musk's ambitious plans for his tech conglomerate.
