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Microsoft reportedly came close to making a move on Cursor, the fast-rising AI-powered code editor, before SpaceX stepped in with a far more dramatic play.
That detail adds a surprising twist to a deal that is already turning heads across the tech industry. According to reports, SpaceX has secured an option to buy Cursor later this year for $60 billion, a figure that instantly places the startup among the most closely watched names in AI development.
A deal Microsoft walked away from
CNBC, citing people familiar with the matter, says Microsoft had explored the possibility of acquiring Cursor but ultimately decided not to submit a bid. The talks were private, and the sources were not identified because they were not authorized to speak publicly.
The idea is intriguing, if only because Microsoft already has a strong foothold in developer tools through GitHub Copilot and Visual Studio Code. Buying Cursor would have meant bringing another coding assistant into a portfolio that already overlaps heavily with the startup’s core product.
That overlap may have been exactly the problem. Regulatory scrutiny would have been one concern. Another possibility is that SpaceX simply showed up with a more attractive offer, one that Cursor and its backers could not ignore.
SpaceX announced on X this week that it is working closely with Cursor to “create the world’s best coding and knowledge work AI.” The company also confirmed that it holds the option to acquire the startup later this year in a deal valued at $60 billion.
According to CNBC, SpaceX’s move came late in Cursor’s most recent funding round, catching some potential investors off guard. That timing alone suggests this was not a routine negotiation. It was a power play.
If SpaceX follows through, the acquisition would reshape the competitive map in AI coding tools. Cursor would suddenly sit inside a much larger battle involving Google, Anthropic, and OpenAI, each pushing its own developer-focused products such as Antigravity, Codex, and Claude Code.
For now, the bigger story is not just that SpaceX wants Cursor. It is that Microsoft, one of the biggest names in enterprise software, apparently looked at the same prize and chose to step back.
Source: neowin
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