Cursor, whose AI coding assistant was launched in 2023, has emerged as a major player in the so-called “vibe coding” trend, in which users rely on natural-language prompts to generate, modify and debug software. The startup became one of the fastest-growing companies in the technology sector as demand for AI-powered programming tools surged.

The acquisition represents a significant step in Musk’s efforts to strengthen SpaceX’s AI capabilities. Bloomberg News reported that Musk has previously acknowledged that his AI business had limited adoption and had gone through job cuts and restructuring.

Cursor’s technology could help SpaceX develop more sophisticated AI tools for coding and other specialised tasks. The startup said in a blog post that its team would gain access to what it described as the world’s largest fleet of GPUs, providing the computing capacity needed to develop stronger and more economical AI models.

The two companies had already begun working together before the acquisition closed. In July, SpaceX and Cursor launched Grok 4.5, an AI model focused on coding, finance and legal applications. The companies said the model was cheaper to use than competing systems.

SpaceX has since introduced Grok Bot, an AI product designed to operate as a group of agents capable of handling assignments throughout the day, and released an updated Grok 4.6 model.

The Cursor acquisition also comes as SpaceX expands its role in AI infrastructure. The company has entered multibillion-dollar arrangements allowing other technology companies, including Anthropic and Alphabet’s Google, to access its computing resources.

Musk has increasingly framed AI as central to SpaceX’s future. During an August meeting with SpaceX employees, he said the company “must succeed on the software front” and described artificial intelligence as the present and future of the business.

He also said AI revenue would exceed all other SpaceX revenue by September, highlighting the scale of the ambition behind the company’s AI push.

With the Cursor acquisition, Musk is combining an established AI software business with SpaceX’s computing capabilities. The move could give SpaceXAI a stronger position in the increasingly competitive market for coding assistants, AI agents and advanced models, putting it into more direct competition with OpenAI, Anthropic and other major AI developers.