Co-founders Aman Sanger, Arvid Runemark, Suare Asif, and Michael Truel (left to right) met at MIT and decided to build Cursor, an AI coding tool that has become popular among developers at AI startups like OpenAI.
Cursor Team
In a recent video posted to X, Faraday Robinette, the 8-year-old daughter of Cloudflare VP Ricky Robinette, showed how to create a Harry Potter-style chatbot that answers questions. By inputting text-based prompts into an AI coding tool called Cursor, she instructed it to simply add a text box that read “Chat with Harry,” display past conversations with the chatbot, and change its background design.
“If this works, that'll be really cool,” she said enthusiastically, as she waited for the cursor's AI to add a spinning lightning rod icon below the text box. After a few seconds, the AI tool complied.
It's not just young, novice programmers who are attracted to Cursor's code-editing and auto-completion tools: Engineers at leading AI startups like OpenAI, Midjourney, Perplexity and Scale AI, as well as tech companies like Shopify and Instacart, are among the 30,000 customers who pay $20 or $40 a month to use Cursor's AI tools to write and edit reams of code.
Cursor, co-founded in 2022 by four friends who met at MIT, announced Thursday that it had raised $60 million in a Series A funding round led by Andreessen Horowitz and with participation from Thrive Capital, Open AI Startup Fund and Google chief scientist Jeff Dean. The new investment values the startup at $400 million, according to a person familiar with the deal terms. The company has annual recurring revenue of more than $10 million.
Cursor's funding comes as investors pour millions into the increasingly competitive AI coding market. Some companies, such as $2 billion-valued Cognition Labs, are launching AI-powered software engineers that aim to perform entire engineering tasks without human help, while others, such as $500 million-valued Codeium, have built systems that can process vast amounts of code at once.
But Myles Grimshaw, a partner at Thrive Capital, said most of these AI coding startups are primarily building “bolt-ons” that developers can layer on top of existing applications they use, rather than creating new interfaces suited to AI-related tasks like training models.
That's where Cursor comes in. The company is building a new kind of “code editor”: an application where engineers can write and tweak code, or, in the words of Cursor CEO Michael Truell, “Google Docs for programmers.” The code editor incorporates an AI model built on large-scale language models like OpenAI's GPT-4 and Anthropic's Claude to automatically predict, write, and edit pieces of code.
Cursor's software has been widely adopted by engineers at AI startups. Shyamal Anadkat, an engineer at OpenAI who works with startups to develop products based on GPT models, said he uses Cursor to fix bugs and build prototypes. “It was a breakthrough in overcoming the cold start problem,” Anadkat told Forbes, describing the struggles of setting up new applications.
Truell and his co-founders have been closely tracking artificial intelligence advances at OpenAI since 2020, even before ChatGPT launched, so they knew the field was ripe for growth, Truell said. The idea to launch an AI coding startup came after witnessing the success of Microsoft GitHub Copilot, an early sign of the complex tasks that could be automated as AI models improve. “GitHub Copilot was the first AI product that actually worked. It wasn't something fancy, and it wasn't at the back of a waiting list,” Truell told Forbes.
Ultimately, Cursor wants to build tools that automate 95% of the tedious tasks engineers do, freeing them up to spend more time on the creative aspects of coding.
“I think in the near future individual engineers will be able to build systems that are much more complex than strong teams can build today,” he said.
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