What Is Cursor? The AI Code Editor SpaceX Just Bought

Cursor is an AI-powered code editor built by the startup Anysphere. If you’ve heard the name only because SpaceX is buying it for $60 billion, here’s the plain-English explanation of what Cursor actually is, what it does, and why developers care about it.

The short version

Cursor is a desktop application that programmers use to write software — but with artificial intelligence built into its core rather than bolted on. It looks and feels like a normal code editor, except an AI assistant is woven into every part of the workflow: completing your code as you type, answering questions about your project, and even carrying out whole coding tasks on its own.

Where Cursor comes from

Cursor was created in 2022 by four MIT students — Michael Truell, Sualeh Asif, Arvid Lunnemark and Aman Sanger — under their company Anysphere. It’s built on the foundation of Visual Studio Code (the hugely popular free editor from Microsoft), which is why it feels instantly familiar to millions of developers: the layout, shortcuts and extensions are largely the same. Anysphere took that familiar base and rebuilt the experience around AI.

The bet paid off spectacularly. Cursor became one of the fastest-growing software products ever, and the company’s valuation climbed from a few hundred million dollars to $60 billion in roughly two years — the price at which SpaceX agreed to acquire it. (If you’re curious whether that number makes sense, see is Cursor really worth $60 billion?)

What Cursor actually does

Cursor’s features fall into three buckets that build on each other:

Smart autocomplete. As you type, Cursor predicts the next chunk of code — not just the next word, but often the next several lines, edited to fit your project. It can suggest multi-line changes and follow your intent across a file.
Chat that understands your codebase. You can ask questions in plain language — “where is the login handled?” or “why is this test failing?” — and Cursor answers using knowledge of your whole project, not just the file you’re looking at.
Agentic edits. This is the headline feature. You describe a task — “add a dark-mode toggle” or “rename this function everywhere” — and Cursor plans and makes the changes across multiple files, which you then review and accept. It moves the tool from “fancy autocomplete” toward “an assistant that edits your repo.”

Why developers love it

Two things set Cursor apart from the pack:

Whole-codebase awareness. Cursor is unusually good at understanding how the pieces of a large project fit together, which makes its multi-file edits feel confident rather than guesswork.
It’s the editor, not an add-on. Because the AI is native to the editor instead of a plugin, it’s present in every keystroke. Power users tend to find this far more fluid than tools that sit off to the side.

For how it stacks up against rivals like GitHub Copilot, Claude Code and Windsurf, see our guide to the best AI coding assistants.

Which AI models does Cursor use?

Historically, one of Cursor’s strengths has been that it’s model-agnostic: it lets you run different frontier models under the hood — including Claude from Anthropic, GPT from OpenAI, and Gemini from Google — and pick whichever suits the task. After the SpaceX acquisition, expect Grok (SpaceX’s own model family) to become a prominent option, alongside a new coding-focused model the two companies have been training together. Whether Cursor stays fully open to rival models is the big question for existing users — we cover it in what the deal means for developers.

Is Cursor free?

Cursor offers a limited free tier, with fuller capabilities — better models, higher limits and the strongest agent features — on paid plans. In 2026 the paid experience moved toward usage-based billing, which gives flexibility but can make heavy use harder to predict. Exact pricing changes over time, so check Cursor’s site for current details.

Who owns Cursor now?

Today, Cursor is owned by Anysphere. That’s changing: SpaceX agreed in June 2026 to acquire Anysphere for $60 billion, with the deal expected to close in the third quarter of 2026. Once it does, Cursor becomes a SpaceX subsidiary — part of the same company that owns Grok and runs Starlink. It’s a remarkable destination for a project that started as a college idea. For the full story, read our breakdown of the SpaceX–Cursor deal.

FAQ

What is Cursor used for?

Cursor is used to write, edit and understand software code. It’s a code editor with AI built in, so developers use it to autocomplete code, ask questions about their projects, and have an AI agent carry out coding tasks across multiple files.

Is Cursor the same as VS Code?

Cursor is built on the same foundation as Visual Studio Code, so it looks and feels similar, but it adds deep, native AI features that standard VS Code doesn’t have. Many VS Code extensions and shortcuts carry over.

Who makes Cursor?

Cursor is made by Anysphere, a San Francisco company founded in 2022 by four MIT students. SpaceX agreed to acquire Anysphere for $60 billion in June 2026.

Is Cursor free to use?

There’s a free tier, but the most capable features and higher usage limits require a paid plan. Pricing has shifted toward usage-based billing, so check the current terms before relying on it heavily.

AI tools and their pricing change frequently, and the SpaceX acquisition is not yet closed. This explainer reflects the current landscape and is reviewed periodically.