Microsoft CEO Satya Nadella speaks in the course of the Microsoft AI Tour occasion in Munich, Germany, on Feb. 25, 2026.
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Prior to SpaceX’s announcement this week that it is obtained the proper to amass Cursor for $60 billion, Microsoft looked at a possible deal for the AI coding startup, in accordance with two folks conversant in the matter.
Microsoft, which is making an attempt to spice up the recognition of its synthetic intelligence instruments to maintain tempo within the booming marketplace for AI instruments, selected to not proceed with a bid, mentioned one of many folks. Both sources requested to not be named as a result of the discussions have been personal.
While Microsoft has gained traction amongst builders with GitHub Copilot, the AI coding market is at the moment being dominated by Cursor, together with Anthropic and OpenAI. Microsoft’s major position within the house has been as an investor and cloud supplier, pumping billions of {dollars} into Anthropic and OpenAI, which have dedicated to hefty spending on Microsoft Azure.
Microsoft declined to remark. A Cursor spokesperson did not reply to a request for remark.
Venture capital companies had lined up financing for Cursor at a $50 billion valuation, CNBC reported earlier this month, underscoring the hovering demand for instruments that may assist customers rapidly assemble web sites and purposes.
SpaceX, managed by Elon Musk, mentioned in a put up on X on Tuesday that it agreed to a deal to purchase Cursor for $60 billion by the tip of the 12 months, or it’ll pay the corporate $10 billion.
“SpaceXAI and @cursor_ai are now working closely together to create the world’s best coding and knowledge work AI,” the corporate mentioned within the put up. Cursor CEO Michael Truell mentioned on X that he is “excited to partner with the SpaceX team to scale up Composer,” referring to his firm’s AI mannequin.
The SpaceX settlement got here collectively so late in Cursor’s fundraising course of that potential traders have been caught off guard by the deal, one of many sources mentioned. SpaceX had supplied Cursor entry to compute within the weeks main as much as this announcement.
Musk merged SpaceX along with his AI startup xAI in February in a deal valued at $1.25 trillion, and is within the means of taking the mixed firm public in what’s prone to be a file IPO.
Microsoft, in the meantime, has seen its inventory worth drop 10% this 12 months, underperforming the broader market and its hyperscaler friends. CEO Satya Nadella informed analysts in January that GitHub Copilot had 4.7 million paying subscribers, up 75% from a 12 months earlier.
OpenAI is pushing its personal Codex programming app. CEO Sam Altman mentioned on X on Tuesday that Codex has reached 4 million energetic customers, lower than two weeks after crossing the three million mark. Anthropic’s Claude Code service has gained reputation this 12 months, serving to Anthropic to achieve $30 billion in annualized income this month.
WATCH: SpaceX inks Cursor deal ahead of IPO: Here’s what to know
