It is not uncommon for startups to engage in acquisition discussions while simultaneously raising new capital. While many private companies prefer to remain independent, Cursor’s $2 billion raise would have fallen short of the capital needed to reach cash-flow breakeven, likely forcing the company to raise substantial funding later, the person said.

SpaceX, which recently merged with xAI, has been aiming to beef up its AI capabilities to better compete with leaders like Anthropic and OpenAI. Acquiring Cursor gives Elon Musk’s company a better chance of challenging rivals in AI coding, currently the most lucrative application of the technology.

However, SpaceX is delaying the potential acquisition of Cursor until after its IPO this summer. This is largely because the company wants to avoid updating its confidential financial filings before the listing, and it will be easier to finance the $60 billion purchase using its new, publicly traded stock.

Despite fast revenue growth, Cursor is facing fierce competition from Anthropic’s Claude Code and OpenAI’s Codex. Given that threat, the startup could face challenges in continuing to raise private capital to finance its massive computing needs. Even if SpaceX doesn’t go through with the acquisition, Cursor is receiving a $10 billion capital injection paid out over time from Elon Musk’s company.