Inside the AI startup Elon Musk is betting $60 billion on

In a groundbreaking move, SpaceX has entered into a partnership with the innovative AI coding startup Cursor, potentially valued at a staggering $60 billion. On Tuesday, the aerospace giant announced that it could either acquire the startup outright or pay $10 billion for its work if the acquisition does not go through. This strategic collaboration positions SpaceX to enhance its capabilities in the competitive AI coding market. SpaceX, which already boasts its AI assistant Grok, is now set to compete alongside prominent players such as Anthropic's Claude Code and OpenAI's Codex. The company stated, "The combination of Cursor's leading product and distribution to expert software engineers with SpaceX's powerful Colossus supercomputer will enable us to develop the world's most effective AI models." For Cursor, the agreement opens the door to access SpaceX's immense computational resources, including the Colossus supercomputer, which is powered by an impressive 200,000 Nvidia GPUs. Michael Truell, Cursor's co-founder and CEO, expressed enthusiasm, stating, "We are thrilled to partner with the SpaceX team to scale up Composer, a significant step in our journey to create the ultimate coding environment using AI." Founded by four MIT alumni, Cursor was designed to revolutionize the coding experience by integrating AI into the software development process. Truell, along with co-founders Sualeh Asif, Arvid Lunnemark, and Aman Sanger, aimed to transform coding from a tedious task into a collaborative effort with AI assistance. The startup has rapidly gained traction, having raised an impressive $60 million in its Series A funding round at a valuation of $400 million, with key investors including Andreessen Horowitz and Thrive Capital. In November 2025, Cursor's valuation soared to $29.3 billion following a $2.3 billion Series D funding round. Cursor's clientele includes major tech firms such as Stripe, Coinbase, and Nvidia, with the latter's CEO, Jensen Huang, being a notable supporter of the platform, declaring that all Nvidia engineers utilize Cursor. However, the company has faced challenges, particularly after Anthropic's release of its latest AI model, which has led some developers to reconsider their use of Cursor. Despite these hurdles, Cursor remains focused on innovation, recently launching Cursor 3, a tool designed for users to create AI coding agents that can perform tasks autonomously. This partnership with SpaceX marks a significant milestone for Cursor amidst other major developments for the space company, including its recent acquisition of xAI and plans for a potential IPO later this year.