SpaceX, fresh off its blockbuster initial public offering last week, said on Tuesday that it is buying the artificial coding assistant Cursor for $60 billion in stock, according to a securities filing.

Elon Musk's space exploration and satellite company said Cursor, developed by San Francisco-based startup Anysphere, will become a wholly owned subsidiary upon closing the deal in the third quarter of 2026.

This high-priced acquisition underscores the immense demand for AI-based coding, a sector currently transforming the software industry.

"We are excited to share that SpaceX has exercised their option to acquire Cursor in an all-stock transaction with the goal of building the world's most useful AI models," Cursor CEO Michael Truell said in a statement shared with CBS News. "We look forward to working closely with the SpaceX team to advance our frontier AI capabilities and continue to work closely with our customers and partners."

SpaceX did not immediately respond to a request for comment. In a social media post on Tuesday, the company said it has been jointly training an AI model with Cursor and will release it soon.

Launched in 2022 by Truell and three of his classmates from MIT, Cursor helped spark a trend called "vibe coding" as AI coding tools have become increasingly capable of autonomously producing computer software. On its website, Cursor bills itself as a "coding agent for building ambitious software."

The deal will help SpaceX compete with AI competitors, including OpenAI and Anthropic, which have their own AI coding tools. Both companies are expected to go public sometime this year.

"SpaceX hopes the Cursor team/product will give a jolt to its Grok AI business (especially in coding), which has so far failed to make a dent in the frontier market (which is led by Anthropic, OpenAI, Google and Meta in the US, in that order)," Vital Knowledge analyst Adam Crisafulli said in a note to investors on Tuesday.

SpaceX alluded to the deal last month in April on its X account, writing that it was working with Cursor to create the "world's best coding and knowledge work AI."

Musk's company also said at the time that Cursor had granted it approval to either buy the company for $60 billion or pay $10 billion to "work together." When it first announced the potential deal, Cursor said teaming with SpaceX subsidiary xAI would enable it to build future software products using xAI's AI data center complex in Memphis, Tennessee.

The deal comes after SpaceX raised $75 billion in its IPO on Friday. SpaceX shares were up 8% in early trading on Tuesday, lifting the company's market capitalization to more than $2.7 trillion. That means investors now see SpaceX as more valuable than companies such as Amazon, which has a market capitalization of $2.66 trillion and Meta Platforms ($1.51 trillion).

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