SpaceX announced on Tuesday that it has signed a formal agreement to acquire artificial intelligence startup Cursor in an all-stock deal valued at $60 billion, a closely watched transaction that comes just days after the company’s record-breaking Nasdaq debut.

Founded in 2022, Cursor developed a widely used AI-powered coding assistant that helps software developers generate, edit, and review code.

The startup has seen rapid growth since its launch, reporting more than $1 billion in annualized revenue as of November, according to a company statement.

The $60 billion in Class A common stock that SpaceX agreed to use for the acquisition of Cursor would result in approximately 3.4 per cent dilution based on the aerospace company’s valuation at its initial public offering.

SpaceX shares surged about 16 per cent on Tuesday, pushing the company ahead of Amazon and Microsoft in market capitalization and making it the fourth most valuable company in the United States.

Earlier this year, Elon Musk combined SpaceX with his artificial intelligence venture, xAI.

The acquisition of Cursor is expected to strengthen the company’s position in the fast-growing AI market and bolster its efforts to compete with rivals such as Anthropic and OpenAI, both of which offer widely used AI coding assistants.

However, SpaceX has yet to disclose detailed information to investors regarding Cursor’s customer base, growth trajectory, or revenue performance.