Anysphere, a San Francisco-based AI startup founded in 2022 by four MIT graduates has reportedly reached a $9B valuation after securing $900M in new funding. According to The Financial Times report, Thrive Capital led the investment round, which is among the largest ever for an enterprise software startup. The round also includes participation from leading firms Andreessen Horowitz (a16z) and Accel. These firms previously backed Anysphere’s $100M round in December, which valued the company at $2.6B. The latest deal more than triples Anysphere’s valuation, bringing total disclosed funding to over $1B.
Thrive Capital, known for investing in companies like OpenAI, Stripe, and GitHub, continues to double down on foundational AI infrastructure. Meanwhile, Andreessen Horowitz has become one of the most active backers of AI startups, with bets in companies such as Character.AI and xAI. Accel, a long-time investor in enterprise software, was an early backer of Slack and Atlassian.
Cursor races ahead in AI-powered coding software
Anysphere is best known for developing Cursor, an AI-powered code editor designed to enhance developer productivity by integrating advanced AI features directly into the coding environment. Cursor allows developers to write code using natural language instructions, generate or update code segments, and query entire codebases in natural language. It also offers smart rewrite capabilities for efficient refactoring and supports integration with existing Visual Studio Code extensions and settings.
The company says Cursor generates nearly a billion lines of working code per day. This transforms programming into what its creators call “vibe coding” – an almost trance-like creative flow powered by artificial intelligence.
From OpenAI roots to vibe AI-powered coding revolution
Anysphere was founded by a group of former OpenAI and Tesla engineers based in San Francisco. Their goal was to build an intuitive, AI-powered coding tool that makes software creation radically faster and more accessible. The inspiration behind Cursor came from the founders’ shared frustration with time-consuming, repetitive coding tasks -especially during late-night hackathons and product sprints, where momentum often stalled on syntax and boilerplate code.
By replacing hand-written code with conversational prompts, Cursor aims to let developers “embrace exponentials and forget that the code even exists,” as the team phrases it. Its impact is already visible across leading tech companies. According to Anysphere, Cursor is now used by engineers at OpenAI, Stripe, Spotify, and prominent AI researchers such as Andrej Karpathy.
Investors rush as AI startup competition intensifies
While Anysphere races ahead, competition is heating up in the AI development space. Windsurf, formerly Codeium, is reportedly in talks to raise funds at a $3B valuation. Ironically, OpenAI -one of Anysphere’s backers -was also said to be exploring a $3B acquisition of Windsurf earlier this year. Other rivals include Poolside, Replit, and Together AI, all of which have raised significant capital in recent months.
Nevertheless, Anysphere’s surge in revenue -reportedly reaching $200M in annual recurring revenue by April -positions it as one of the fastest-growing software companies in history. This momentum, combined with its high-profile customer base and loyal investor backing, makes it a standout in an increasingly crowded field.
What comes next for Cursor’s AI-powered coding tool?
With its new $900M war chest, Anysphere plans to scale Cursor even further. Although the company has not formally disclosed its roadmap, industry observers expect major hiring initiatives, product expansions, and possibly the development of more AI-native tools designed for broader enterprise use. The company’s website emphasises its commitment to pushing the boundaries of human-computer interaction through AI.
As enterprise adoption of AI accelerates, demand for tools that make software development more intuitive is likely to soar. Google recently revealed that over 30% of its internal code now involves AI-generated suggestions. That trend, combined with the exponential growth of models like ChatGPT and Claude, sets the stage for tools like Cursor to redefine how software is written.
Redefining software engineering, one prompt at a time
The soaring valuation of Cursor underscores investor belief in a future where AI is deeply embedded in every stage of software development. As competitors race to keep up and AI funding rounds grow larger, Cursor’s momentum shows no signs of slowing.
While concerns persist around whether valuations in the AI space are sustainable, Cursor’s performance and growing user base suggest its appeal runs deeper than hype. For developers already working with the tool, it’s not just a product -it’s a new way of thinking about code.
