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The $30 billion AI code editor that might already be obsolete [1]

['Ellsworth Toohey']

Date: 2026-03-09  

Cursor's four cofounders became billionaires in 2025 selling an AI code editor that hit $1 billion in annualized revenue by November. Three months later, they held an all-hands meeting with slides titled "War Time."

Over the holiday break, the company's own engineers had tested Anthropic's Opus 4.5 and found that the model could write code well enough to skip human review. A developer could hand off a feature request and get back working code. Cursor was built as a "Google Docs for programmers," but if the AI doesn't need a human collaborator, the Google Doc doesn't matter, Forbes reports.

The company's new mandate: "P0 #1: Build the best coding model." Not the best wrapper around someone else's model. The best model.

Cursor doubled to $2 billion in annualized revenue by February 2026, but Claude Code passed it — Anthropic's terminal-based coding tool went from zero to $1 billion in six months and cleared $2.5 billion last month. OpenAI's relaunched Codex agent logged over 1 million downloads in its first week last April. Andrew Wang, CEO of mortgage startup Valon, said 90-plus employees dropped Cursor for Claude Code because tasks got done "10x faster."

Cursor is building its own Composer models using DeepSeek, Kimi, and Qwen as open-source foundations, with reinforcement learning on proprietary data and about 20 AI researchers on the project. It's also developing "grind mode" to manage hundreds of coding agents at once, but the engineers found a problem: agents assigned to large teams tend to get lazy and produce lower-quality output.

The company, founded in 2022 by four MIT friends, now has about 400 employees and is valued at roughly $30 billion.

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