SpaceX said it has struck a deal with Cursor to develop a next generation “coding and knowledge work AI,” which includes a surprising provision—an option to buy the popular software development platform for $60 billion later this year.

Partnering with and potentially purchasing a leader in the hottest AI product category can only be seen in the context of SpaceX’s much-anticipated public offering. Investors seeking more value in the IPO might see its engagement with Cursor as another way to extract value from Elon Musk’s increasingly sprawling tech conglomerate.

The deal won’t shock those who follow the industry closely. Last week, it was reported that xAI would begin renting computing power from its data centers to Cursor, with the coding startup using tens of thousands of xAI chips to train its latest AI model. And last month, two of Cursor’s most senior engineering leaders, Andrew Milich and Jason Ginsberg, left the company to join xAI, where both report directly to Musk.

SpaceX described the partnership as a project combining Cursor’s “product and distribution to expert software engineers” with SpaceX’s Colossus supercomputer, which the company claims has the equivalent compute power of a million Nvidia H100 chips.

SpaceX also said that at some undisclosed point later this year, it will either pay Cursor $10 billion for its work or acquire the company for $60 billion. Last week, TechCrunch reported that Cursor was eying a $50 billion valuation in an upcoming private fundraising round. That figure itself reflects an astonishing series of leaps. Cursor was valued at just $2.5 billion in January of last year, climbed to $9 billion by last May May, and was assigned a $29.3 billion post-money valuation when it closed on $2.3 billion in Series D funding in November.

Either figure would represent a significant expense for SpaceX, which is widely seen to be losing money following the acquisition of xAI and the social media network X and is planning extensive capital investment. The brief statement did not say if either deal could be paid in SpaceX stock.

In the meantime, the move could shore up weaknesses at each company, but it also reveals them. Neither Cursor nor xAI has proprietary models that can match the leading offerings from Anthropic and OpenAI — the same companies now competing directly with Cursor for the developer market.

Cursor still uses and sells access to Claude and GPT models even as both firms roll out their own coding tools, an awkward arrangement that this new SpaceX partnership may be designed to eventually escape.

The Centre for Information Technology and Development (CITAD) has called for increased investment in artificial intelligence (AI) research and innovation, following Nigeria’s ranking of 72nd out of 195 countries in global AI readiness.

The call was made on Monday during a Research Methodology Workshop on AI readiness at subnational levels, held in Kano.

Speaking at the event, Salihu Abdulkarim of the National Information Technology Development Agency (NITDA) said Nigeria’s current ranking reflects both opportunities and gaps in the country’s digital development.

According to him, “Nigeria, with 179.6 million mobile subscribers and over 90,000 kilometres of optic fibre network, is projected to generate 18.3 million dollars in 2026, with Information and Communication Technology expected to contribute 21 per cent to the Gross Domestic Product by 2027.”

He compared Nigeria’s position with other African countries, noting that Egypt ranks 5th globally, while Kenya and South Africa are ranked 65th and 67th respectively, with Tunisia at 99th.

Abdulkarim said Nigeria’s National AI Strategy, launched in August 2024, is built on five key pillars aimed at driving transformation, including talent development through AI centres of excellence and research fellowships.

He added that the Federal Government plans to produce three million tech graduates with skills in artificial intelligence, machine learning, and data science to strengthen the country’s workforce.

However, he identified key challenges slowing progress, including poor infrastructure, fibre optic vandalism, right-of-way issues, unmet targets, and limited digital access in rural areas.

He also raised concern over the migration of skilled technology professionals to countries such as the United Kingdom and Canada in search of better opportunities.

“Upscaling is key, but AI will not take over human jobs,” he said.

In his remarks, the Executive Director of CITAD, Y.Z. Yau, said the organisation is working to assess how ready states are to adopt AI.

“We want to know if state governments are ready, what infrastructure they have, and how many data centres are available,” he said.

He explained that Kano, Plateau, and Bauchi states were selected for a pilot assessment representing northern Nigeria.

Also speaking, a lecturer at Bayero University Kano, Hafsat Ahmed Kabir, stressed the importance of infrastructure for successful AI deployment.

“AI deployment requires computing power, reliable electricity, high-speed internet, data centres, and cloud services because the system depends on processing large amounts of data,” she said.

Kabir added that one of the biggest challenges is implementing AI strategies at the state level.