SpaceX has exercised its option to acquire Cursor, a startup specializing in artificial intelligence code writing, in an all-stock deal valued at $60 billion. This move is part of Elon Musk’s plans to expand his reach in AI.

The acquisition comes shortly after SpaceX’s record-breaking debut on public markets as a rocket and AI company. In April, SpaceX agreed to an option to purchase Cursor, a decision aimed at creating highly useful AI models. Following its recent initial public offering, the company proceeded with the acquisition of Cursor’s parent company, Anysphere.

SpaceX’s shares saw significant growth since beginning trading, elevating Musk to the status of the world’s first trillionaire. The company is now valued at approximately $2.5 trillion, with stocks climbing over 5 percent in premarket trading.

Musk, who also leads Tesla, is increasingly interested in AI. He established xAI, the creator of the Grok chatbot, competing against OpenAI’s ChatGPT and Anthropic’s Claude. In February, SpaceX merged with xAI, valuing the combined entity at over $1 trillion.

The company has plans to build a major AI chip manufacturing plant in Texas. Additionally, SpaceX has secured deals with Google and Anthropic to receive computing power.

Although Musk’s companies often merge, they seldom acquire external companies. The acquisition of Cursor is anticipated to finalize in the third quarter of the year.

Founded in 2022, Cursor quickly gained attention as tech firms began using its tools. It secured substantial investments from leading firms like Thrive Capital, Andreessen Horowitz, and Accel.

With the announcement in April, Cursor stated that limited access to computing power was hampering its growth. The arrangement with SpaceX will provide access to xAI’s infrastructure.