SpaceX has agreed to acquire AI coding startup Cursor in a $60 billion stock deal, just days after the space company’s historic IPO and less than two months after the companies announced their partnership.
The deal is aimed at helping SpaceX’s AI division (built around Elon Musk’s AI company xAI, which SpaceX merged with earlier this year) catch up with major AI labs. SpaceX’s AI division is in the midst of a shakeup, having run into repeated controversies, including allowing users to generate deepfakes of women and children without their consent, despite being the centerpiece of a promised IPO.
SpaceX told investors during the IPO process that it believes there is a reachable market for its AI products worth $26 trillion, roughly the GDP of the United States. SpaceX announced Tuesday that the acquisition is likely to close in the third quarter of this year.
Before SpaceX came knocking, Cursor was on track to close a $2 billion funding round from Andreessen Horowitz, Thrive, Nvidia and others, valuing the AI coding startup at $50 billion, TechCrunch reported.
Musk’s company announced an interesting deal in April ahead of its IPO. The deal was to buy Cursor for $60 billion in stock or pay a $10 billion penalty if the deal fell through.
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