Cursor raises $900M at $9B valuation

$900 million on a $9 billion post‑money means investors are paying ~45× trailing ARR if the FT’s “about $200 million annual run‑rate” number is right. --&gt; <a href="https:&#x2F;&#x2F;www.ft.com&#x2F;content&#x2F;a7b34d53-a844-4e69-a55c-b9dee9a97dd2?utm_source=chatgpt.com" rel="nofollow">https:&#x2F;&#x2F;www.ft.com&#x2F;content&#x2F;a7b34d53-a844-4e69-a55c-b9dee9a97...</a><p>That multiple only makes sense if you believe two things at once:<p>Cursor keeps compounding like GitHub itself. Right now the product is an Electron wrapper around VS Code plus a very slick Copilot‑style agent. It’s winning dev‑to‑dev word‑of‑mouth, but most of the heavy IP (the frontier model) still lives at OpenAI. Cursor’s moat has to be distribution + workflow lock‑in, otherwise every IDE extension store is a free market.<p>AAC (AI‑assisted coding) is still early‑days, not a feature. The bullish view is that we’re going from “autocomplete that writes a function” to “agent that forks a branch, edits five files, and opens a PR.” If that happens, the IDE vendor that owns the agents could take a tax on all software creation—$9B looks cheap in that scenario.<p>Skeptical takes:<p>Switching cost is low. Developers live in tabbed editors; the moment VS Code ships “Copilot Agent” with equivalent quality, the convenience advantage evaporates.<p>Model margins flow upstream. OpenAI (already on the cap table) can keep more of the unit‑economics by bundling a first‑party agent, leaving Cursor to chase seat growth while gross margins compress.<p>FOMO capital cycle. We’re at the part of the hype curve where Tiger 2.0 funds can’t buy equity in OpenAI&#x2F;Anthropic but still need AI exposure on the balance sheet, so application‑layer plays clear at eye‑watering marks.<p>The part I do find compelling is speed: two years from MIT dorm to ~$200 M ARR is wild. If Cursor can convert that velocity into genuine platform gravity—plugins, team workflows, per‑repo context that doesn’t travel well—then maybe the bet pencils out. Otherwise it’s an expensive option on a feature the incumbents haven’t finished shipping yet.

This $9BN valuation is highly questionable. They can make a lot of money and also lose a lot of money very quickly if the momentum evaporates.<p>It only takes Microsoft to destroy them with VS Code + Copilot and to further lower prices for longer (and they can afford to do that for years).<p>This sort of hype happened with Clubhouse ($4B valuation until the users stopped signing up.), Hopin ($9BN until the pandemic ended) and Inflection AI ($4B and no-one uses it after the hype).<p>There really is no lock-in case for Cursor and users can easily cancel and switch back to VS Code.<p>I would sell at this point, before this bubble pops and the competitors begin to gain ground.

Good app. But not sure it’s worth 9b.<p>It is one change in license to VS Code (which it’s based on) from making it worthless.

All signs that we are in bubble and it is only getting bigger and bigger :)

What do you even do with so much money? It’s just a text editor