Elon Musk is wasting no time. Barely had his SpaceX rung the bell at Nasdaq for the biggest IPO in history when the company announced another major move. It will acquire Anysphere, the company behind the popular coding tool Cursor, for $60 billion in its own stock. The deal is expected to close in the third quarter of this year once it receives approval from the relevant authorities.
Why would a rocket company go after a code editor? The answer is simpler than it seems. Musk has bet on AI, and Cursor gives him what he has been missing so far: customers who actually pay for artificial intelligence.
Cursor and its rise to fame
Cursor was founded in 2022 by four friends from MIT. At the time, it was a small project, a tool for programmers. Today, the company reports around $2.6 billion in annual revenue from business customers, and according to Forbes, it even surpassed $4 billion in annualized revenue in early June. Between February and the end of April, it grew from $2 billion to $3 billion. The main driver behind that leap is its new Cloud Agents product, which can spend hours solving complex programming tasks in the background.
Cursor is used by more than half of the companies in the Fortune 500. Stripe's Patrick Collison said the tool helps every one of its 40,000 engineers. Nvidia CEO Jensen Huang called it his favorite enterprise AI service. For a four-year-old company, that is a remarkable achievement.
But Cursor is not without competition. When Anthropic launched Claude Code, Cursor found itself on the defensive and switched, as Forbes described it, into war mode. And the numbers bear that out. Its market share fell from 41 percent last June to around 26 percent this May, according to spending data from Ramp. Anthropic now controls half of the category.
And now to those who will profit the most from the deal. Cursor's founders are very young. Michael Truell, Aman Sanger, and Sualeh Asif are all 25, while Arvid Lunnemark is 26. Once the deal is completed, each of them will have an estimated net worth of around $2.7 billion, according to Forbes. Their fortunes will essentially double.
Early investors will profit as well. Andreessen Horowitz holds a roughly 10 percent stake worth $6 billion. Thrive owns around seven percent, worth $4.2 billion. Thrive is on both sides of the table, with stakes in both SpaceX and Cursor, and its combined holdings are now worth more than $10 billion.
A dispute over computing power, not model quality
Cursor built impressive coding models at a reasonable cost, but it hit a ceiling. It lacked access to computing power, and growth is difficult without it. That is exactly what SpaceX is offering. Thanks to the Colossus supercomputer in Memphis, the company has access to 200,000 graphics chips, with plans to expand that number to as many as one million. But this mountain of computing power had not been generating revenue. SpaceX needed a way to monetize these chips, and Cursor provides it.
Back in April, SpaceX secured a choice: either acquire Cursor for $60 billion later this year or pay around $10 billion for a partnership. The company ultimately opted for the acquisition. If the deal ultimately falls through, SpaceX faces a $1.5 billion termination fee and $8.5 billion in computing resources. If the transaction is blocked by antitrust objections, it will pay only $4 billion, according to the documents.
The two companies have also been jointly training a new artificial intelligence model for several months. It will appear in both Cursor and Grok Build, xAI's coding tool. It is worth recalling that SpaceX acquired xAI in February this year.
Shares soared, SpaceX overtook Amazon
SpaceX shares jumped ten percent at the start of trading, adding roughly $247 billion to the company's market value. The price climbed to $211.27, more than 56 percent above the IPO price of $135. CNBC reports a daily gain of around 16 percent. If the gains hold, SpaceX will surpass Amazon and become the fifth-most valuable company in America. Its market value climbed to $2.5 trillion after the IPO.
Paying in stock makes sense precisely because of that enormous valuation. For the $60 billion deal, SpaceX will give up a relatively small piece of the company. At the IPO valuation, it amounted to dilution of just 3.4 percent. "One of the things that makes SpaceX so valuable is precisely how valuable it is. Because of SpaceX's high valuation, buying Cursor costs substantially less in terms of dilution," billionaire Bill Ackman wrote on X.
Leased computing power for Anthropic and Google
An interesting question hangs over the contracts under which SpaceX leases out its computing capacity. In recent weeks, it has signed agreements with Anthropic and Google to lease cloud computing power worth roughly $26 billion annually. Both include a 90-day termination clause, allowing the company to quickly reclaim the capacity.
"If the use of Grok and Cursor grows enough, they may return to using the capacity internally. For now, however, it appears they will continue providing capacity to Anthropic and Google," said Gil Luria of D.A. Davidson.
Sources: blog.kilo.ai and wsj.com
