Microsoft skipped Cursor, and the creator of the AI coding assistant is moving to SpaceX for $60 billion

Microsoft declined to purchase Cursor, and Space X announced the acquisition of the startup for $60 billion.

What happened
- Space X, led by Elon Musk, officially announced on X (formerly Twitter) its intention to buy Cursor—a AI startup specializing in programming.

- The offer is valued at $60 billion; if the deal does not close by year‑end, Space X agrees to pay the startup $10 billion as a penalty.

Why Microsoft backed out
- Over recent months Microsoft explored the possibility of acquiring Cursor but decided not to submit an offer.

- The company aims to strengthen its position in the rapidly growing segment of AI tools for developers. While GitHub Copilot is already popular among programmers, the market leaders are Cursor, Claude Code (Anthropic), and Codex (OpenAI).

- In Microsoft’s role, it mainly acts as an investor and cloud provider: it has invested billions into Anthropic and OpenAI, which use Azure for their computing.

How the deal evolved
1. Cursor attracted venture funding at a $50 billion valuation.

2. At the end of the round, Space X offered access to its supercomputing capabilities, creating conditions for an agreement.

3. After the final stage of the round, it became known that Space X intended to buy the startup; the information spread after the deal was concluded.

Industry context
- Space X recently merged with xAI (Musk’s AI startup) in a transaction valued at $1.25 trillion, setting the stage for a potential IPO that could be record‑setting in terms of initial public offering size.

- Microsoft’s shares fell 10% over the year, worse than other major cloud providers.

- In January Satya Nadella announced that GitHub Copilot has 4.7 million paid subscribers—a 75% increase YoY.

- OpenAI promotes Codex: on X Sam Altman noted the service already serves 4 million active users, and the milestone of 3 million was reached less than two weeks before publication.

- Claude Code from Anthropic is gaining traction and helped the company reach $30 billion in annual revenue.

Conclusion: Microsoft declined to buy Cursor, and Space X completed its acquisition for $60 billion. This event underscores large tech firms’ efforts to strengthen their positions in the fast‑growing market of AI programming tools.