SpaceX snaps up AI coding darling Cursor as valuation soars past Amazon

Elon Musk’s SpaceX has overtaken Amazon to become the world’s fifth-largest listed company after a blistering post-IPO rally, as the newly public firm unveiled a $60bn (£45bn) takeover of AI coding start-up Cursor.

Shares in Musk’s rocket and AI giant rose more than eight per cent in pre-market trading on Tuesday, extending a surge that has seen the stock climb more than 50 per cent since last week’s record-breaking flotation.

The rally lifted SpaceX’s market value to roughly $2.75 trillion (£2.05 trillion), pushing it ahead of Amazon’s $2.66tn valuation and within striking distance of Microsoft, currently worth around $2.95tn.

The gains also added another $100bn-plus to Musk’s personal fortune, taking his net worth above $1.4 trillion, and extending his lead as the world’s richest person by a considerable margin.

SpaceX’s rise has been one of the most extraordinary market debuts in history.

The company raised $85.7bn in the largest IPO ever completed, and has added almost $1 trillion in market value in a matter of days.

Investors appear willing to look beyond the company’s current financial performance and buy into Musk’s long-term vision for AI and space infrastructure.

That optimism was on full display on Tuesday as SpaceX announced it would acquire Cursor owner Anysphere in a $60bn all-stock transaction.

Founded in 2022 as Anysphere, Cursor has become one of Silicon Valley’s fastest-growing software companies by developing AI tools that help programmers write, edit and debug code.

Alongside products from OpenAI and Anthropic, AI coding assistants have emerged as one of the first major commercial successes of the generative AI boom, attracting millions of users and rapidly growing enterprise revenues.

Cursor counts major companies including Stripe, Adobe and Nvidia among its customers. Nvidia chief executive Jensen Huang has previously described it as his “favourite enterprise AI service”.

The start-up had reportedly been preparing a new funding round that would have valued the company at around $50bn.

Instead, it will now become part of SpaceX’s expanding AI operation.

The two businesses have been working together since April, when SpaceX announced an unusual agreement giving it the option to either acquire Cursor for $60bn or pay a $10bn break fee.

At the time, SpaceX argued that combining Cursor’s software with its vast computing infrastructure would help accelerate the development of advanced AI models.

“The combination of Cursor’s leading product and distribution to expert software engineers with SpaceX’s million H100 equivalent Colossus training supercomputer will allow us to build the world’s most useful models,” the company said.

The acquisition could also provide a much-needed boost to xAI, Musk’s AI business behind the Grok chatbot, which SpaceX merged with earlier this year.

Despite being positioned as a key growth engine for the newly listed company, xAI has faced repeated controversies and internal upheaval.

Grok has been criticised for generating harmful content, while several senior executives and co-founders have departed during a wider restructuring effort.

Musk himself admitted earlier this year that xAI “was not built right the first time around” and required rebuilding from the ground up.”

SpaceX remains unprofitable despite its enormous valuation, reporting more than $9bn of losses across 2025 and 2026 as it pours money into artificial intelligence infrastructure, data centres and computing capacity.

While the company remains best known for launching reusable rockets and operating the Starlink satellite network, much of its valuation is increasingly tied to expectations surrounding AI.

In IPO filings, SpaceX told investors it sees a potential $28 trillion addressable market spanning AI infrastructure and enterprise software applications.

Of that figure, roughly $22.7 trillion is linked to enterprise AI products and services – the very market where Cursor has established itself as one of Silicon Valley’s breakout winners.

The acquisition will be paid entirely in SpaceX shares, giving Cursor investors exposure to one of the world’s most valuable listed companies while allowing Musk to preserve cash for further expansion.