Microsoft explored buying Cursor before SpaceX lined up a $60 billion deal
Microsoft explored acquiring Cursor, an artificial intelligence startup, but ultimately declined to pursue the acquisition. Instead, SpaceX has secured a major deal with the company, gaining significant influence over Cursor’s future direction and valuation.
Under the agreement, SpaceX holds the rights to acquire Cursor outright for $60 billion, with an alternative option to pursue a $10 billion partnership arrangement. The substantial acquisition figure reflects Cursor’s value in the competitive AI software market, particularly as a developer tool and coding assistant platform.
Microsoft’s decision to step back from the acquisition reflects the company’s strategic focus on consolidating its existing AI developer products. Rather than expanding through external acquisition, Microsoft is concentrating resources on GitHub Copilot, its established AI-powered coding assistant that directly competes in the code generation and developer assistance space.
The transaction demonstrates the intense competition among major technology companies and organizations vying for dominance in the artificial intelligence sector. This deal also represents SpaceX’s expanding involvement in software and technology ventures beyond its core aerospace business, signaling diversification into adjacent technology markets. The outcome exemplifies how strategic priorities can shift during acquisition negotiations, with established tech giants sometimes choosing internal development over external expansion.