AI Coding Assistant Cursor Raises $1.35 Billion, Valuation Nears $100 Billion

Founded just three years ago, the AI programming tool Cursor has achieved a valuation of nearly $10 billion and recently secured an additional $900 million in funding. Anysphere, the company behind Cursor, established its goal: to create an AI development environment that simplifies code completion and enhances project understanding for developers. The team aims to make Cursor not just a code-writing tool but a powerful assistant that can "understand projects" and improve collaboration among developers. To achieve this, they made a strategic decision to develop Cursor as a plugin for the widely familiar Visual Studio Code. This approach allows developers to experience Cursor's new functionalities directly within a user interface they already know well, greatly accelerating the product's market acceptance process. Cursor stands out among many AI code assistants primarily due to its core technological features, particularly the "Agent Mode." This mode lets developers issue high-level, cross-file commands using natural language, such as "rebuild the project database connection logic" or "implement a user login process authentication flow." Upon receiving instructions, Cursor's intelligent agent automatically analyzes the relevant files in the project, understands the dependencies, and executes a series of revisions. This interactive method frees developers from mundane tasks, allowing them to focus more on system design and functional logic. Additionally, the agent learns from user and team code patterns, providing even better suggestions and ensuring the project maintains its unique style and standards over time. The underlying technology supporting this capability is the "Model Context Protocol" (MCP), developed by Anthropic. Anysphere recognized that the quality of AI-generated code directly depends on the breadth and depth of the context the model receives. MCP allows Cursor to efficiently integrate and understand entire code repositories, and it can connect to project management tools (like Linear), design tools (like Figma), and documentation tools (like Notion). This extends the AI's "view" beyond just the code itself to the entire software development lifecycle, enabling it to make judgments and execute modifications that align with the project's overall logic and goals. In the latest release of Cursor 1.0, additional functionalities have further refined its product philosophy. For instance, the BugBot feature can automatically review code merge requests submitted to GitHub, spotting hidden errors and inconsistencies, and leaving comments and repair suggestions on the code review platform. This automates part of the code review work, significantly increasing efficiency. Moreover, support for Jupyter Notebooks expands Cursor's application into data science and machine learning research, opening up a vast market of users with latent needs. The "Memories" feature also helps Cursor retain historical conversations and user preferences in specific projects, making long-term collaboration smoother and more efficient. In the ongoing debate about whether AI tools will replace human labor, Anysphere’s answer is "collaborative intelligence"—AI should enhance rather than replace human capabilities. According to the company, their product is designed to help developers reduce cognitive load, increase work efficiency, and scale the best practices across projects and teams. This positioning seems to have won the approval of many engineers and businesses. Reports indicate that companies like Stripe and OpenAI are already using Cursor internally, with the platform handling a significant amount of code daily. The newly acquired $900 million will provide Anysphere with the resources needed for its next phase of development. The company plans to deepen its core technology research, continue advancing the AI capabilities of Cursor, and enable it to handle more complex software engineering tasks. Additionally, the funds will be used to attract more top technical talent and accelerate the commercialization process and market expansion of their product. “I believe there is still a lot of work to be done in both product and technology areas, and we hope to keep pushing forward as a leading force in the industry,” said Michael Truell, CEO of Anysphere. References: 1. Bloomberg: Anysphere, Hailed as Fastest-Growing Startup Ever, Raises $900 Million 2. Cursor Changelog 1.0 3. TechFundingNews: Meet Cursor—How Anysphere’s MIT-Born AI Startup Hit a $9.9 Billion Valuation in 3 Years Operating/Sorting: He Wanglong