SpaceX just pulled off the biggest IPO in history. Days later, it's writing one of the biggest checks in tech history to a startup most people have never heard of.
The target: a four-year-old company called Cursor. The price: $60 billion.
Cursor was founded in 2022 by four MIT grads, with 25-year-old Michael Truell as CEO. Their product helps developers write code faster using AI, and millions of developers now use it - including teams at Stripe, Shopify, and OpenAI itself.
Annual revenue went from a small fraction of today's number to over $1 billion in under a year - a 10x jump that puts Cursor among the fastest-growing software companies ever built.
That's why the price tag looks the way it does. Cursor isn't a niche product anymore - it's a core piece of how modern code gets written.
SpaceX locked in the right to buy back in April, when the two companies started working together on AI training and compute. The option was simple: $60 billion to buy outright, or $10 billion just for the collaboration.
SpaceX picked door number one.
The $85 billion IPO gave SpaceX a war chest its earlier ventures never had. Sixty billion of it is now spoken for, but there's still plenty left for rockets.
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Here's why SpaceX is spending IPO money on a coding startup instead of more rockets. Grok - the AI model Musk's xAI built before merging with SpaceX in February - is losing the AI race.
It trails models from Anthropic, OpenAI, and Google, with coding the area where the gap is widest. That's also the slice of the AI market growing fastest as companies push developers to ship more code with fewer engineers.
Cursor isn't being bought for its product alone - it's being bought for its data and the user base behind it.
The training data Cursor pulled from millions of developers writing code in its tools is the exact stuff Grok needs to close the gap. Musk has already posted on X that newer Grok versions improved after training on Cursor data, and this deal makes that pipeline permanent.
Cursor sees how real developers fix bugs, ship features, and rewrite code in real time. That's the kind of feedback loop you can't fake with fake data, and it's what every major AI lab has been racing to build.
SpaceX closed Monday at a $2.5 trillion valuation, sitting between Amazon and Meta. Its first move with that public-market firepower wasn't a satellite network or a Mars program.
It was an AI catch-up purchase - and probably not the last big check Musk writes this year.
With Grok still behind the pack, the IPO cash gives Musk room to keep spending his way back into the race.
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