SpaceX purchases Bay Area AI coding startup for $60 billion

Days after SpaceX’s massive initial public offering, which made CEO Elon Musk the world’s first trillionaire, the company announced Tuesday it was purchasing Bay Area artificial intelligence startup Cursor for $60 billion.

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The move has been anticipated since April, when the companies announced a deal that SpaceX would either pay Cursor $10 billion for “coding or knowledge work AI,” or purchase it later this year. That same month, Business Insider reported SpaceX was renting out massive computing space in Colossus, its Memphis, Tennessee, data center, and two senior Cursor employees left the startup to work directly for Musk on SpaceX’s coding product.

Tuesday’s deal is part of an effort to boost Musk’s AI company, xAI, which has fallen behind key competitors following multiple controversies and an exodus of the coding company’s co-founders in March.

“We look forward to working closely with the SpaceX team to advance our frontier AI capabilities and continue to work closely with our customers and partners,” said Cursor CEO Michael Truell in a statement.

Founded in 2022 by Truell and fellow Massachusetts Institute of Technology dropouts Aman Sanger, Sualeh Asif and Arvid Lunnemark, Cursor has enjoyed a meteoric rise in the tech industry as a leader in AI coding assistants in the past four years. 

In 2025, the company brought in more than $1 billion in revenue, and its valuation spiked from $2.5 billion to nearly $30 billion by the end of the year. But in a booming and fast-changing sector, the company faces stiff competition from Anthropic and OpenAI: Fortune reported earlier this year that products from AI’s biggest companies can generate code, rather than assist an engineer in writing code faster.

Based in San Francisco, Cursor’s headquarters is located at what used to be the historic Northpoint Theatre at 295 Bay St. Once home to a single-screen theater, the North Beach building now houses the startup with an unconventional office culture that takes a casual dress code to a new extreme: a no-shoes policy. 

Shortly after the company signed a four-year full building lease in 2025, pictures of the company’s overrun shoe rack went viral on X when employee Ben Lang asked users what other companies were hopping on the trend. As it happens, the trend is growing among tech startups. Lang built a website called noshoes.fun that lists several other companies that share the no-shoes policy, including San Francisco-based Notion and Gusto.