New reports have revealed that tech giant Microsoft (MSFT) recently considered buying Cursor, an artificial intelligence (AI) coding startup, before SpaceX, the space company founded by Elon Musk. Although Microsoft had a private conversation with Cursor about a potential buyout, the tech company did not make an official offer. Shortly after, SpaceX locked in rights to acquire Cursor for $60 billion.
Claim 30% Off TipRanks
Forget margin or options. Here's how the pros trade NVDAMicrosoft Passes on Buying Cursor as Competition Heats Up
Microsoft has been trying to strengthen its position in the AI Coding space through its product, GitHub Copilot, developed in collaboration with OpenAI. According to the CEO, Satya Nadella, the product had 4.7 million paying subscribers as of January, up 75% year-over-year. Despite this momentum, the tech giant reportedly considered acquiring Cursor in recent weeks but ultimately decided against making a formal bid.
Interestingly, Microsoft was not the only major player interested in Cursor. OpenAI also made two separate attempts to acquire the AI coding startup, but both offers were rejected. Cursor opted to remain independent, with its revenue reportedly doubling roughly every two months, reflecting its rapid growth trajectory.
Meanwhile, competition in the AI coding sector continues to accelerate. OpenAI’s Codex has reportedly attracted 4 million active users in less than two weeks since launch, while Anthropic’s Claude Code has contributed to the company reaching an estimated $30 billion in annualized revenue this month.
SpaceX Moves Fast to Lock Up Cursor
SpaceX announced the deal with Cursor in an X post on Tuesday, April 22. According to the post, both private companies will work together to build the “world’s best coding and knowledge work AI”. Cursor CEO Michael Truell also confirmed the partnership and expressed excitement over the company’s collaboration with SpaceX.
Notably, the deal outlines two options for SpaceX. The company can either buy Cursor outright for $60 billion later this year or pay $10 billion for the work the two firms are doing together. The $60 acquisition price would represent a notable step up from the $50 billion pre-money valuation Cursor was previously seeking in an active fundraising co-led by Andreessen Horowitz, Nvidia (NVDA), and Thrive Capital.
Is MSFT a Good Buy?
Wall Street analysts rate Microsoft (MSFT) as a Strong Buy, based on TipRanks consensus data. The stock currently trades around $432, with an average price target of about $573 and an upside potential of approximately 32.5%. For more information on this stock’s performance, price target, and ratings, visit the TipRanks Stocks Comparison Center.
