Elon Musk has shown interest in Cursor… to the point of considering acquiring it.
The new SpaceX – xAI grouping has laid out a $60 billion purchase option. If the deal isn’t closed by year’s end, it will pay $10 billion to the startup, officially “for its work.”
SpaceXAI and @cursor_ai are now working closely together to create the world’s best coding and knowledge work AI.
The combination of Cursor’s leading product and distribution to expert software engineers with SpaceX’s million H100 equivalent Colossus training supercomputer will…
— SpaceX (@SpaceX) April 21, 2026
xAI, GPU infrastructure provider for Cursor
The work in question centers on developing “an AI for coding and knowledge work.” Training will take place on Colossus, the supercomputer SpaceX touts as having the power of 1 million H100s.
This AI may be Composer 2.5, Cursor’s upcoming generation model. Last week, at least, it was reported that xAI would rent computing power (“tens of thousands of GPUs”) from the startup.
In March, two Cursor executives joined xAI, where they now oversee the product team. The startup was aiming, as part of an upcoming funding round, for a valuation of $50 billion – thus consistent with the proposed purchase price.
At the start of 2026, by extrapolating its monthly revenue, Cursor stood at about $2 billion in ARR. It expects to triple that by the end of 2026. The development of its own models, coupled with a possibility to switch to less costly LLMs such as Moonshot AI’s Kimi family, has helped it achieve a positive gross margin. In this regard, enterprise sales are profitable; not those to individual developers.
To read more on :
Software quality: the cumulative effects of coding agents
What the Claude Code leak revealed
Services, the new AI gold rush
Why AI-generated passwords are becoming a real problem
