SpaceX moved fast and upended what had been shaping up as one of the more anticipated private fundraising rounds in Silicon Valley this year. Just hours before Cursor was set to close a $2 billion raise.
SpaceX moved fast and upended what had been shaping up as one of the more anticipated private fundraising rounds in Silicon Valley this year. Just hours before Cursor was set to close a $2 billion raise at a $50 billion valuation, the rocket and AI company announced it had secured an option to acquire the coding startup for $60 billion later in 2026, or alternatively pay $10 billion for the companies' collaborative work together. The announcement, posted on X by SpaceX, effectively halted the fundraising discussions that had drawn participation from Andreessen Horowitz, Thrive Capital, Nvidia, and Battery Ventures, according to TechCrunch.
Cursor is built by Anysphere Inc., a San Francisco company founded in 2022 by four MIT classmates: Michael Truell, who serves as CEO, along with Sualeh Asif, Aman Sanger, and Arvid Lunnemark. Asif, who is originally from Karachi, Pakistan, represented his country at the International Mathematics Olympiad from 2016 to 2018, according to Forbes. The four co-founders had been exploring ideas in artificial intelligence as early as 2021 before settling on a product that would improve on what Microsoft's GitHub Copilot offered developers. The result was an AI-native code editor that has since grown into one of the most widely adopted developer tools in the industry, used by more than a million daily active users and over 50,000 businesses as of early 2026, including companies like Nvidia, Adobe, Uber, and Shopify.
The company's financial trajectory has been equally striking. Cursor was valued at $2.5 billion in January 2025, then climbed to $9 billion by that May, and closed a $2.3 billion Series D round in November 2025 at a post-money valuation of $29.3 billion. By February 2026, its annualized revenue had crossed $2 billion, according to Bloomberg and TechCrunch. That kind of growth put it in the same conversation as Anthropic and OpenAI, both of which have their own competing coding products in Claude Code and Codex respectively. Sam Altman said on X this week that Codex has reached 4 million active users, underscoring how competitive the segment has become.
For SpaceX, the deal is partly a compute story. The company merged with Elon Musk's separate AI venture xAI in February 2026 in an all-stock transaction that valued the combined entity at $1.25 trillion, according to the New York Times. That brought the Colossus supercomputer cluster in Memphis under the SpaceX umbrella, a facility that the company claims carries the equivalent compute power of one million Nvidia H100 chips. SpaceX said the partnership with Cursor would pair Cursor's developer reach with that infrastructure to build what both companies are calling the world's best coding and knowledge work AI. Prior to the SpaceX announcement, it was reported that xAI had already begun renting compute capacity to Cursor, with the startup using tens of thousands of xAI chips to train its latest model.
The timing is also tied to SpaceX's own capital markets ambitions. According to TechCrunch, SpaceX is deliberately delaying any formal acquisition of Cursor until after its anticipated summer IPO, partly to avoid revising its confidential financial filings before listing, and because a completed deal would be simpler to structure using publicly traded stock. Analysts have described the potential listing as one of the largest in history. CNBC also reported that Microsoft had evaluated a potential deal for Cursor but chose not to move forward with a bid.
The broader stakes of a deal like this resonate particularly in the Gulf, where governments have been placing large bets on developer infrastructure and AI tooling. The UAE, operating under its National AI Strategy 2031, has committed to building major compute capacity, including a 5-gigawatt AI campus in Abu Dhabi developed with OpenAI, Oracle, and Nvidia. Saudi Arabia's HUMAIN initiative is similarly focused on building out a national AI software and infrastructure stack. In that context, a merged SpaceX and Cursor entity would represent exactly the kind of scaled coding AI platform that regional governments and enterprises are seeking to adopt. Cursor's enterprise traction with Fortune 500 companies gives it credibility that Gulf technology buyers have historically looked for before broad adoption, and any deal that consolidates its compute and product roadmap under a single structure only strengthens that case.
Cursor CEO Michael Truell, writing on X after the announcement, said he was excited to partner with SpaceX to scale up Composer, the company's AI model. Whether SpaceX ultimately exercises its option to buy the company at $60 billion remains to be seen. But for now, the deal has repositioned one of Silicon Valley's fastest-growing AI startups as a core asset in Elon Musk's expanding technology ecosystem, with a Pakistani-born co-founder at the center of it all.
