The acquisition comes as SpaceX shares continued their strong rally following the company’s record-breaking initial public offering (IPO). By midday trading, SpaceX shares had risen more than 11%, pushing the company’s market valuation above Amazon and making it the world’s fifth-largest publicly traded company.
Founded in 2022 and headquartered in San Francisco, Cursor specialises in artificial intelligence tools that assist software developers in writing and managing code, particularly for enterprise and business applications.
The companies had signalled a possible merger earlier this year when they announced a strategic partnership that included an option for SpaceX to acquire Cursor. According to a filing with the US Securities and Exchange Commission (SEC), the all-stock transaction is expected to be completed during the third quarter of 2026, after which Cursor will operate as a wholly owned subsidiary of SpaceX.
SpaceX said combining Cursor’s software expertise with its “Colossus” AI supercomputer would accelerate efforts to develop advanced artificial intelligence systems.
Cursor initially gained popularity by allowing developers to work with leading AI models such as Anthropic’s Claude and Google’s Gemini. The company later launched its own AI model, Composer, which has become increasingly competitive in the rapidly expanding AI coding market.
The startup’s growth has coincided with the rise of “vibe coding,” a trend in which users create software applications through natural-language instructions instead of traditional programming. Cursor has also benefited from advances in AI agents capable of handling increasingly complex tasks.
In its latest update, Composer 2.5, the company said the model demonstrated significant improvements in long-term task management, instruction-following and collaboration with users.
Cursor was valued at $29 billion during its most recent funding round in November. The acquisition nearly doubles that valuation and marks one of the largest AI-related transactions to date.
The deal further strengthens SpaceX’s growing AI portfolio. Earlier this year, Musk announced the acquisition of xAI by SpaceX and unveiled plans for large-scale AI infrastructure projects, including satellite-powered data centres and a $55 billion semiconductor manufacturing facility in Texas.
Investor enthusiasm surrounding SpaceX’s AI ambitions has helped drive a sharp increase in the company’s share price. Since its IPO last week, the stock has gained roughly 40%, lifting SpaceX’s market value to approximately $2.76 trillion and placing it close behind Microsoft among the world’s most valuable companies.
Sualeh Asif’s role in building Cursor into one of the most valuable AI startups represents a major achievement for a Pakistani-born entrepreneur in the global technology industry.
