SpaceX said it has secured an option to either acquire code-generation startup Cursor, an AI code-generation startup co-founded by Pakistani-born Sualeh Asif, for $60 billion later this year, or pay $10 billion for their new partnership, as it pushes deeper into the lucrative market for AI developer tools.

Along with OpenAI and Anthropic, Cursor is one of several Silicon Valley startups that have drawn waves of developers by using artificial intelligence to automate coding, a business where AI companies have found early commercial traction.

The deal could give xAI, the ⁠Grok chatbot maker that SpaceX merged with in February, a stronger foothold in the AI coding market where it has so far lagged rivals. It also provides Cursor with more computing capacity to develop AI models.

“The combination of Cursor’s leading product and distribution to expert software engineers with SpaceX’s million H100 equivalent Colossus training supercomputer will allow us to build the world’s most useful models,” SpaceX said in an X post on Tuesday.

“Cursor has also given SpaceX the right to acquire Cursor later this year for $60 billion or pay $10 billion for our work together.”

Colossus is xAI’s supercomputer cluster ⁠in Memphis, which it has touted as the largest in the world. The company has been spending billions of dollars on AI infrastructure.

The announcement comes ahead of SpaceX’s highly anticipated public debut in the coming months, with the company eyeing ⁠a valuation of close to $1.75 trillion and a $75 billion fundraise that could go down as the biggest IPO in history.

Two product engineering heads at Cursor, a startup that sells ⁠AI models for coding tasks, said in March they joined SpaceX to contribute to the company’s lunar projects and xAI, Musk’s AI startup that ⁠is now part of SpaceX.

Musk welcomed the engineers, Andrew Milich and Jason Ginsberg, saying, “Orbital space centres and mass drivers on the Moon will be incredible.”

According to Forbes, Sualeh Asif, originally from Karachi, cofounded Cursor with three friends from MIT. Asif represented Pakistan in the International Math Olympiad from 2016 to 2018.