The article discusses the revival of the AI coding startup Cursor, which was struggling due to competition from other coding agents like Anthropic's Claude Code. Following its decline, Cursor secured a significant investment from SpaceX, valued at $60 billion, which is expected to strengthen its capabilities in the AI space. The piece highlights the initial praise for Cursor's revenue growth and its recognition by AI researcher Andrej Karpathy for its concept of "vibe coding." Cursor's CEO, Michael Truell, held an emergency meeting in January 2026 to address the competitive landscape.

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Social media declared Cursor dead. Then SpaceX handed the AI startup a $60 billion lifeline.

Written off after the rise of Anthropic’s Claude Code, Cursor now looks to reclaim its crown as a vibe-coding heavyweight with SpaceX’s backing

Published: June 19, 2026 at 7:30 a.m. ET

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(7 min)

Illustration of Elon Musk holding up the word "CURSOR" and a Cursor icon. SpaceX and Cursor have been jointly training a new AI model utilizing SpaceX’s Colossus supercomputer cluster.Photo: MarketWatch photo illustration/Getty Images

Cursor had a rough start to 2026.

The AI coding startup once garnered lavish praise for its explosive revenue growth. When prominent AI researcherAndrej Karpathy coined the term “vibe coding” in early 2025, he gave an explicit shoutout to Cursor. But faced with a barrage of AI coding agents hitting the market — most prominently, Anthropic’s Claude Code — Cursor CEO Michael Truell called an emergency all-hands meeting in January.

About the Author

Christine Ji

Christine Ji is a reporter covering Big Tech.

William Gavin

William Gavin is a tech reporter for MarketWatch. He is based in New York.

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