Hitching a Ride on SpaceX’s War Machine: Cursor’s $60 Billion Rise to Prominence

Original title: Inside Cursor's wild rise

Original author: Shubhangi Goel and Charles Rollet, Business Insider

Original translation: Peggy, BlockBeats

Editor's note: This article details the rapid rise of Cursor CEO Michael Truell and the AI coding unicorn.

In 2019, 18-year-old Truell, then an MIT student, completed a programming test in less than 10 minutes that was originally expected to take an hour. A few years later, he founded Anysphere with several MIT classmates and launched Cursor, aiming to redefine how developers write code. By the end of 2025, Cursor was used by millions of developers, with revenue growing 10 times in less than a year, surpassing $1 billion.

But Cursor's story is not just a Silicon Valley narrative of a "genius programmer succeeding as an entrepreneur." The more noteworthy part of the article lies in its revelation of the structural predicament facing AI application companies: when a company is built on top of frontier models, it can grow rapidly by leveraging their capabilities, but it can also be quickly squeezed out when model providers enter the fray themselves. This is precisely the relationship between Cursor and Anthropic. Cursor was once highly dependent on Anthropic's models. After Anthropic launched Claude Code, the two transformed from partners into potential competitors, prompting Cursor to push forward with its self-developed model, Composer.

Meanwhile, Cursor's high growth has been accompanied by controversy. The article mentions that Cursor's hiring process is extremely demanding, requiring candidates to participate in multi-day or even multi-week unpaid "work trials." Internally, there has also been long-standing concern about over-reliance on a single AI model supplier. These details make Cursor's success seem more complex: it is both one of the most representative application-layer companies in the AI coding wave and a startup seeking a balance between rapid expansion, an intense culture, and model dependency.

What truly ushered in a new phase of the story was the connection between Truell and Elon Musk's SpaceX. To support its self-developed model, Cursor needed expensive and scarce computing power. Meanwhile, SpaceX/xAI needed to enhance Grok's coding capabilities. On the surface, the collaboration is a complement of computing power, data, and model capabilities. Behind it lies a potential $60 billion acquisition arrangement. If the deal eventually goes through, Cursor could become a key coding infrastructure within Musk's AI ecosystem. If it remains independent, it must prove that an AI application company can thrive in the cracks between frontier model giants and grow into a true generation-defining company.

The core question of this article is: Will Cursor become the entry point for the next generation of software companies, or will it become just another piece in the computing power war among AI giants?

The following is the original translation:

Michael Truell: From Prodigy Programmer to Cursor CEO

In 2019, 18-year-old MIT student Michael Truell sat in a cafe at the Computer History Museum, staring at a programming test question. It was supposed to take about an hour to complete, but he finished it in less than 10 minutes.

"He completely crushed the problem," recalled tech investor Ali Partovi. Partovi runs a project dedicated to finding the world's best programmers at the undergraduate level. With plenty of time left, Partovi asked Truell to come up with a programming question for him instead. Partovi, a programmer who co-founded Code.org, took longer to finish. When he was done, his paper was a mess; in contrast, the teenager's lines of code were neat and clear.

Now 25, Truell is the CEO of Cursor, an AI coding startup that has reached a potential $60 billion acquisition agreement with Elon Musk's SpaceX. The thin, red-haired young man with a fluffy hairstyle is described by colleagues as quiet and friendly. Unlike some young founders who love to show off their latest revenue figures or gym achievements, he prefers to immerse himself in coding for long periods, almost like a form of meditation. Within Cursor, it's well known that he didn't pay himself a salary for the first few years of the company.

However, beneath his humble exterior, Truell has long harbored ambitions as grand as anyone in Silicon Valley. He has told employees he wants Cursor to become a "generational company." As a teenager, he developed a popular programming game themed around conquering the universe. Just after graduating from MIT and starting his company, he and several college classmates challenged Microsoft in the code editor space, ultimately winning. At Cursor, he fosters an intensely high-pressure work culture: to find the perfect fit, the company puts candidates through complex, unpaid "work trials" that can sometimes last for weeks.

Becoming one of the fastest-growing startups in the tech industry hasn't been easy. Cursor has constantly had to navigate the delicate and tense relationship with Anthropic, which was once its primary AI model supplier. This tension escalated when the frontier AI lab began launching its own wildly popular coding tools. After Claude posed an existential threat to the company, Truell declared a state of emergency. Subsequently, he tied Cursor's fate ever more deeply to Musk's recently listed SpaceX, a company eager to win the AI race and in control of billions of dollars' worth of computing power.

Cursor declined to comment for this article. Anthropic and SpaceX also did not respond to requests for comment.

Truell now faces his biggest test yet: will the partnership with Musk succeed? Regardless of the outcome, the Cursor CEO is already planning to ensure his company secures its place in the history of computing.

Truell grew up in New York, the son of two journalists. A gifted programmer from a young age, he also started promoting programming early. At 15, while a student at the elite private school Horace Mann, he helped develop a coding game called Halite, which taught programming basics by having players conquer territory on a grid. The project attracted thousands of users, mostly high school and college students who had never written code before, and won him a $10,000 prize from a top mathematics association.

At MIT, he double-majored in computer science and mathematics and began brainstorming startup ideas. Claire Shorall, who helped run a startup boot camp Truell attended during his undergraduate years, said she was impressed by his curiosity and humility. At the time, he was making cold calls to doctors across the US to validate an early startup idea. Truell asked Shorall to sit beside him as they huddled around a landline phone and critique his communication skills. That project, which aimed to be a ZocDoc competitor, ultimately failed, but Shorall could see that Truell possessed more than just raw coding ability.

"I gave him some advice — but it was clear he already had that capability," she said.

After graduating in 2022, Truell co-founded Anysphere with MIT classmates Sualeh Asif, Arvid Lunnemark, and Aman Sanger. It started as a code editing platform. Within 12 months, they had reached $1 million in recurring revenue by creating a better alternative to Microsoft's open-source code editor, VS Code.

"Our mission over the next few years is to make programming an order of magnitude faster, while also making it more fun and creative," Truell told TechCrunch at the time.

Controversy Behind High Growth: Unpaid Trials, Extreme Hiring, and Model Dependency

To achieve this mission, Cursor was officially launched in March 2023 and grew rapidly. It quickly gained traction with developers and enterprises eager to boost their productivity significantly. In 2024, Cursor disclosed it had over 40,000 customers and set a grand goal: to create a "magical" tool that could one day write all the world's software.

"Something beautiful is happening to code," the company wrote in a blog post at the time.

By the end of 2025, Cursor had been adopted by millions of developers. The company announced its revenue had grown 10-fold in less than a year, surpassing $1 billion.

Cursor's growth was explosively intense, and that intensity was reflected in its hiring process. Four former employees say Truell was deeply involved in recruiting. He often scouted top engineers on GitHub and X, then invited candidates to Cursor's sprawling, campus-like headquarters in San Francisco for multi-day "work trials."

During the trial, candidates did almost everything regular employees would do: eat lunch with the team, work at a desk using a company computer, and complete projects based on a frozen version of the Cursor codebase.

"It really gives us a lot of signal for whether a candidate has the raw technical ability to succeed in our environment," Truell said on a podcast last November.

However, some criticized these work trials as unpaid. A person who claimed to have interviewed with Cursor posted on Reddit, denouncing the process as "exploitative and unethical."

One former employee recalled receiving an email late at night, asking them to report to the Cursor office by 9 a.m. the next day to complete a series of programming projects. In another instance, the former employee claimed Cursor had a management-level candidate undergo a month-long work trial. During this time, the person met almost every team member, but the company ultimately decided not to hire them.

"After a month, their attitude was: 'We could probably find someone better than this candidate,'" the former employee said. They believed this demonstrated both Cursor's extremely high standards for new joiners and the effectiveness of the screening mechanism.

Despite its phenomenal growth, Cursor's executives have long been concerned that the company had become overly attached to and dependent on a single AI supplier. Employees often used one word to describe the relationship between Cursor and Anthropic: strange.

The two companies were highly interdependent. Cursor relied heavily on Anthropic's AI model to power its coding tool. At the same time, Anthropic benefited immensely from Cursor's explosive growth. According to an employee familiar with the numbers, Cursor accounted for roughly 40% to 50% of Anthropic's revenue at one early stage.

"Both sides, to some extent, realized they needed each other. We brought a lot of revenue to Anthropic," said another employee. "But at the same time, Anthropic had its own competing product."

Before launching its blockbuster code editor, Claude Code, Anthropic executives privately assured Cursor management that the product was more of a research project than a major commercial push. A source familiar with the matter said there was communication between the two sides on this issue. But Claude Code quickly went viral among developers. By February 2026, its annualized revenue had grown to $2.5 billion, about $500 million more than Cursor's annualized revenue at the time. This figure was first reported by Bloomberg. Developers also started posting that they were canceling Cursor in favor of Claude Code.

Even before this, concerns among Cursor executives about the company's dependence on Anthropic were already high. One reason was that Anthropic had previously cut off service to Windsurf, a competing AI coding startup, during its acquisition negotiations with OpenAI.

On January 5th, Truell called an all-hands meeting that one employee described as an "emergency meeting," announcing that Cursor needed to build its own AI model. According to two employees, the message was clear: We must ensure we don't get left behind. The company would cancel all non-essential meetings, and employees might be temporarily reassigned to work with different teams that week. We must stay flexible and adapt quickly to change.

Following the meeting, Cursor began a lengthy pricing analysis comparing Claude Code and OpenAI's Codex, while also holding meetings to reassure its largest customers. Executives concluded that Cursor must double down on developing its own model to reduce reliance on frontier model labs and gain more control over pricing.

Although Cursor declined to comment for this article, Truell described the company's relationship with Anthropic as a "deep partnership" in a recent interview, stating, "We are very grateful for it."

Cursor's Biggest Bet: Breaking Away from Anthropic, Bonding with Musk

Subsequently, Cursor launched Composer, its own set of models tailored for coding. Composer is built on an open-source model from the Chinese AI lab Moonshot. It has already begun gaining traction among developers. Cursor claims that in the Composer 2.5 model released in May, over 85% of it came from Cursor's own work — meaning the underlying Moonshot model constituted only a small part of the final product.

"Composer has received extremely positive feedback," said Cursor engineer Lucas Garza. This is mainly attributed to its low cost and high speed, especially in the context of rising AI costs and pressure on tech companies' engineering budgets.

Cursor's latest tools are also generating new buzz. On a hot afternoon in June, Cafe Cursor, a pop-up coffee shop run by Cursor in San Francisco's North Beach tourist district, appeared to be the busiest cafe on the block. It was giving free lattes and $50 credits to enthusiastic entrepreneurs, many of whom praised Cursor for boosting their productivity.

Tech professionals lounged at Cursor's pop-up coffee shop, Cafe Cursor, earlier this month. Charles Rollet/Business Insider

Aneesh Dharani, who founded an AI flashcard startup, said that despite having no software engineering background, Cursor helped him actually build his product. Another founder, Devon Lim, said he used Cursor to replace an outsourced engineer who had abruptly "gone silent" and stopped working for his sales-oriented startup.

But building and running a top-tier AI model is extremely expensive, and Cursor didn't have enough chips to do it entirely on its own. So, this spring, Truell and his company found another founder with similarly "interstellar-scale ambitions" to fill this gap: Elon Musk.

On April 21st, Truell announced a new partnership on X in his characteristically concise style.

"Excited to work with the SpaceX team to scale Composer. This is a major step towards building the best place to code with AI," he wrote.

On the surface, the deal seemed beneficial for both parties. Cursor gained access to SpaceX's vast computing resources, including Colossus, a supercomputer powered by hundreds of thousands of top-tier Nvidia AI chips. In return, SpaceX's Grok could get a boost in the AI coding race. A xAI contractor previously told Business Insider that Grok was not "the best at coding."

What Truell didn't mention in his X post was that a much larger development had already materialized: he had agreed that SpaceX might acquire Cursor for $60 billion later this year.

This news caught many Cursor employees off guard, as Truell had always spoken about building Cursor for the long term. According to a former employee, whenever acquisitions were brought up, Truell would say: "This is a huge risk we are taking, or a huge bet."

The structure of the deal is also unusual. According to SpaceX's S-1 filing last month, if either party decides not to proceed with the transaction, SpaceX would pay Cursor a $1.5 billion termination fee and provide an additional $8.5 billion in free computing power.

Ali Partovi, one of Cursor's earliest investors, is not privy to the deal's internal workings. He said that while many entrepreneurs claim they would never sell their company, in reality, they fall on a spectrum. Partovi believes Truell leans closer to the end favoring independence.

"His ambition, confidence, and drive will push him more towards staying independent," Partovi said.

For now, Cursor remains independent and continues its rapid growth. According to Forbes, its revenue doubled in three months, reaching $4 billion.

Some early progress has already emerged. Musk posted on X that a recent version of Grok had improved significantly after being trained on a "large amount" of data from Cursor. Both Grok and Composer are climbing the ranks on highly-watched AI model leaderboards, also known as benchmarks, though they haven't topped them yet.

For Musk, the goal is clear: his AI will become "very strong" regardless.

"Whether it will be the strongest remains to be seen, but I will never give up," he wrote on X. "Never."

For Cursor, the ultimate goal is less clear, given the still highly open-ended structure of the deal with SpaceX.

Truell stated in a recent interview that Cursor now has 700 employees and serves 60% of the Fortune 500. He also said the company can now be compared to many of the world's largest public software companies.

"It is indeed a bit crazy," he said. "And we are very aware of how special this is – how unprecedented it is from a historical perspective."

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