Anysphere, the AI startup behind code editor Cursor, in talks to close at $10 billion valuation

Anysphere, the AI startup behind the popular AI-powered code editor Cursor, is in discussions to raise hundreds of millions from investors in a round that could push its valuation close to $10 billion. Just months ago, the company was valued at $2.5 billion, marking an extraordinary jump in investor confidence.

The latest round is expected to bring in hundreds of millions, with Thrive Capital leading the charge, according to people familiar with the discussions. Talks are still ongoing, and the final terms could shift, but the scale of the negotiations reflects the growing interest in AI-driven developer tools.

“Anysphere Inc. — the startup behind the popular artificial intelligence-powered code editor, Cursor — is in talks to raise hundreds of millions from investors at a valuation close to $10 billion,” Bloomberg reported, citing people familiar with the matter.

Cursor: The AI Code Editor That’s Reshaping Software Development

Founded in 2022 by MIT alumni, Anysphere has quickly gained traction among software engineers. Its product, Cursor, has become a go-to AI-powered coding assistant, drawing attention for its seamless integration with developer workflows. Unlike AI chatbots that simply generate code snippets, Cursor actively participates in the coding process, rewriting, debugging, and assisting developers as they work.

Cursor has quickly earned a loyal following among engineers at Shopify, OpenAI, and Instacart, thanks to its ability to interpret codebases and provide smart, context-aware suggestions. Unlike basic AI-powered autocomplete tools, Cursor doesn’t just generate code—it actively assists developers in refining, debugging, and improving their work in real time.

Developers can describe what they need in plain English, and Cursor translates those requests into functional code. If an error appears, Cursor catches it before it becomes a bigger problem. When engineers need to track down a specific function or variable, they can simply ask Cursor rather than comb through thousands of lines of code. And when it’s time to clean up or refactor a project, Cursor can rewrite entire sections without breaking the logic behind them.

By embedding AI directly into the coding process, Cursor isn’t just an assistant—it’s a collaborator. Its ability to adapt to real-world development needs has made it a serious rival to tools like GitHub Copilot and Replit’s Ghostwriter, raising the bar for what AI-driven coding assistants can do.

Anysphere’s Explosive Growth

Few AI startups have grown as quickly as Anysphere. In just 12 months, the company surpassed $100 million in annual recurring revenue (ARR)—a feat that places it among the fastest-growing AI startups ever.

Its funding history reflects this momentum. Anysphere started with an $8 million seed round backed by OpenAI’s Startup Fund, followed by a $60 million Series A led by Andreessen Horowitz. A $105 million Series B, led by Thrive Capital and Andreessen Horowitz, pushed its valuation to $2.6 billion.

Now, with a new round in the works, its valuation could quadruple. The company’s growth has also been reflected in GAIA benchmark tests, where it has outperformed other AI coding assistants across multiple difficulty levels.

Venture Capitalists Are All In on AI

Anysphere’s latest funding talks are part of a larger trend in AI investment. Venture capital firms are pouring money into startups that go beyond chatbots and language models, focusing instead on real-world AI applications like research tools, automation software, and AI-driven coding assistants.

Investors believe Anysphere could be one of the defining companies in AI-assisted software development, and they’re willing to bet big on it. The company’s backers already include Andreessen Horowitz, and it has raised $175 million in venture funding to date.

It’s unclear how much this round will bring in, but with Anysphere’s momentum, it’s unlikely to be its last. If the past year is any indication, Cursor isn’t just another AI coding assistant—it’s shaping up to be a dominant force in software development.