Cursor's Popularity Has Come at a Cost. GPT-5 May Have Arrived at the Right Time.
The breakout AI coding star is racking up huge Anthropic bills and hustling to plug its pricing leaks.
As the tech world tuned in for the feverishly hyped launch of GPT-5, few companies outside OpenAI had more riding on the moment than coding-app maker Anysphere.
Appearing on the livestream, CEO Michael Truell told OpenAI president Greg Brockman the model was “incredibly smart,” marveling at its instant grasp of complex code bases (OpenAI is a seed investor in Anysphere and once tried to buy the company).
That same day, GPT-5 rolled out to Cursor, Anysphere’s flagship coding software. The model became not just another tool for its customers to use, but potentially, a liferaft for the company.
Launched just over a year ago, Cursor lets developers write usable code from natural-language prompts. It’s become a fast favorite among programmers, and the money has followed: Two months ago it was doing $500 million in annualized revenue and it’s grown well above that now, two sources familiar with the figures told me.
Despite raising at a $10 billion post-money valuation in June, Cursor is already fielding inbound offers from investors that would value it at twice that amount, I hear. So far Truell has been hesitant to take on more money, but if he does it wouldn’t surprise me if he tries to get a valuation as high as $30 billion.
Cursor has also sparked intense debate in the VC world over whether its rapid growth masks deeper flaws. Namely, it has rough unit economics and a deep reliance on models from Anthropic, which is also its fiercest competitor.
It’s tough to get an exact read on the product's losses, because different types of customers have wildly different cost profiles and its overall margins bounce around on a week by week basis, but taken together Cursor has negative gross margins, according to sources familiar with the figures.
The biggest sinkhole comes from a subset of individual developers who gorge on its subscription offerings, racking up huge costs for the company that it pays out in compute bills to Anthropic. (Its enterprise pricing model – which sources tell me is the future for the company — has far better margins because it’s a combination of seat based and consumption based pricing.)
There aren’t flashing warning signs on the company’s balance sheet. Anysphere runs pretty lean with around 150 employees and has a single digit monthly cash burn, a source tells me. With around $1 billion in cash reserves, it has plenty of runway.
But for a company that sits squarely in the software-as-a-service sector, which routinely has gross margins in the 70-80% range, negative is bad news. And it raises questions about just how easy it will be to turn a business as dynamic and popular as this into a long term success.
