How Spacex Preempted A $2b Fundraise With A $60b Buyout Offer

Until a fewer hours earlier SpaceX announced its deal, giving it nan action to get Cursor — nan shaper of AI-powered coding package — for $60 billion, Cursor was connected way to adjacent a $2 cardinal backing information later this week, according to a personification acquainted pinch nan matter. The information would person weighted nan institution astatine $50 billion. SpaceX said it would either bargain nan institution astatine immoderate constituent later this twelvemonth aliases salary $10 cardinal to Cursor to collaborate connected AI development.

Cursor was apparently moving a parallel process, negotiating a imaginable acquisition by SpaceX while simultaneously finalizing a backstage backing information pinch investors that see Andreessen Horowitz, Thrive, Nvidia, and Battery Ventures, specifications of which were first reported by TechCrunch past week.

It is not uncommon for startups to prosecute successful acquisition discussions while simultaneously raising caller capital. While galore backstage companies for illustration to stay independent, Cursor’s $2 cardinal raise would person fallen short of nan superior needed to scope cash-flow breakeven, apt forcing nan institution to raise important backing later, nan personification said.

SpaceX, which precocious merged pinch xAI, has been aiming to beef up its AI capabilities to amended compete pinch leaders for illustration Anthropic and OpenAI. Acquiring Cursor gives Elon Musk’s institution a amended chance of challenging rivals successful AI coding, presently nan astir lucrative exertion of nan technology.

However, SpaceX is delaying nan imaginable acquisition of Cursor until aft its IPO this summer. This is mostly because nan institution wants to debar updating its confidential financial filings earlier nan listing, and it will beryllium easier to finance nan $60 cardinal acquisition utilizing its new, publically traded stock.

The woody appears to use some sides for respective reasons.

Despite accelerated gross growth, Cursor is facing fierce title from Anthropic’s Claude Code and OpenAI’s Codex. Given that threat, nan startup could look challenges successful continuing to raise backstage superior to finance its monolithic computing needs. Even if SpaceX doesn’t spell done pinch nan acquisition, Cursor is receiving a $10 cardinal superior injection paid retired complete clip from Elon Musk’s company.

Additionally, if SpaceX goes done pinch nan acquisition, nan abstraction elephantine will apt support nan full Cursor squad intact. Unlike Google’s acquisition of Windsurf, which was system arsenic an acqui-hire of cardinal individuals, SpaceX presently lacks a meaningful AI workforce and is wide seen arsenic not having a important AI business.

Meanwhile, SpaceX has entree to immense computing capacity astatine its information centers successful Mississippi and Tennessee, which it tin connection Cursor, perchance successful lieu of portion of nan $10 cardinal “collaboration” costs promised nan coding startup.

The institution would besides for illustration nationalist investors to worth it arsenic much than conscionable a abstraction and outer business. By promising to perchance get Cursor, SpaceX positions itself arsenic an AI company, giving it a chance to garner nan overmuch higher valuation aggregate that Wall Street presently assigns to AI companies.