Cursor in talks to raise $2 billion at $50 billion valuation

AI coding startup Cursor is in talks to raise at least $2 billion in new funding at a $50 billion valuation, according to sources familiar with the matter. Returning investors Thrive and Andreessen Horowitz are expected to lead the financing round. Battery Ventures may participate as a new investor, and strategic backer Nvidia is also expected to join, the sources said. The deal, which is already oversubscribed but not yet finalized, would nearly double Cursor's previous $29.3 billion post-money valuation from six months ago. Cursor forecasts reaching an annualized revenue run rate exceeding $6 billion by the end of 2026, implying it expects to at least triple its revenue over the next ten months. In February, the company hit $2 billion in annualized revenue. The startup, which faces competition from Anthropic's Claude Code and OpenAI's Codex, recently achieved slight gross margin profitability after introducing its proprietary Composer model last November. It also gained the ability to use less expensive models like China's Kimi. Previously operating at negative gross margins, Cursor now earns positive margins on enterprise sales but continues to lose money on individual developer accounts, according to one source. Cursor was founded in 2022 by MIT students Michael Truell, Sualeh Asif, Arvid Lunnemark, and Aman Sanger under the original name Anysphere.