Not many 25-year-old CEOs have a photo of Robert Caro over their desks. Michael Truell does. As Truell takes a Zoom call, the image of Caro—legendary biographer of Lyndon Johnson and Robert Moses, known for his exhaustive, decades-long research—looms over his shoulder, sweatered, bespectacled, writing intently.
They make an incongruous pairing. Truell, the CEO of $29.3 billion AI coding company Cursor, is just a few years out of MIT and widely viewed as a rock star coder’s coder. Soft-spoken with a spine, Truell is unnervingly young and looks perhaps even younger, but he’s guided Cursor to a rapid-fire rise. Today, Cursor is used by 67% of the Fortune 500, with its platform every day generating 150 million lines of enterprise code.
I would have expected Truell to admire Apple’s Steve Wozniak, or Jensen Huang. But it’s Caro who Truell wants to watch over him.
“He’s a motivational example of someone who’s done useful, consequential work that’s taken a long time,” says Truell. “I actually most enjoyed his memoir about his writing process. There are few examples of people who set off to do multiple decades-long projects consistently.”
There’s an irony here: Truell admires work that takes decades, but he runs a quintessential startup of the AI era—a world defined by compressed, vertiginous speed. Slow down for even a week, and you might get left behind. And right now, that could be happening to Cursor.
Cursor—which has raised billions from venture capital’s biggest names including Andreessen Horowitz, Thrive, and Accel—is a mere four years old. It uses generative AI to instantly streamline and automate coding tasks that historically would have taken programmers days, weeks, or longer. In doing so, it’s helped create a paradigm-shifting business trend. As corporate America tussles for return on its investments in AI, coding has been the first real place the productivity gains have been quantifiable and undeniable. And Cursor has been at the forefront of the revolution.
Cursor’s annualized revenue crossed $2 billion in February and has marched well past that since, two investors told Fortune. Those investors emphasized that customers aren’t just buying Cursor—they’re using the hell out of it. As this article went to press, the company was reportedly raising a new funding round that would value it at $50 billion.
67%
Percentage of the Fortune 500 using Cursor.
According to the company, Cursor estimates that as of March its tools were being used to write 150 million lines of enterprise code each day.
And yet, if you’ve been on social media recently (and your algorithm has tech brain rot), there’s a high chance you’ve seen tweets declaring, “Cursor is dead.”
Cursor has a problem. And that problem is called Claude Code, a competitor launched by Anthropic barely a year ago. Some say Claude Code, bolstered by Anthropic’s $380 billion largesse, could soon unseat Cursor altogether. And it’s all happened astonishingly fast. Reports have surfaced of customers moving off Cursor; one Cursor investor told Fortune that several startups in his portfolio are decoupling from it. Key talent, including the company’s head of engineering, have recently jumped ship. And there’s a sense that while Cursor created the AI coding boom, it’s on the verge of being left behind.
“The thing about this market is that things change so quickly,” one VC invested in a Cursor competitor says. “If we were sitting here a year ago, you’d be writing the opposite article, ‘Cursor is on top of the world,’ right?”
It’s a story distinctly of the AI era: Cursor is four years old but already has an innovator’s dilemma, arguably outgunned by newer products in the market it popularized. Every AI startup fears OpenAI or Anthropic releasing a product directly in competition with theirs. It’s the nightmare scenario, and Cursor is living it, more quickly than Truell and his team ever expected.
“I’ve been building some form of software for 27 years now,” says Aaron Levie, Box CEO and Cursor customer. “Every single friend I have says the same thing: The sheer rate of change is unlike anything we’ve ever seen.”
Truell and his Cursor colleagues acknowledge that they’re scrambling to adapt to the demands of rapidly accelerating competition, though they believe they’re up to the task. “It’s pretty clear the market is standardizing on a couple solutions,” Truell says. “It’s a narrow field of folks really at scale here.”
Cursor has moved faster than almost any other startup in Silicon Valley history. But it may not be fast enough.
Cursor’s whirlwind rise
Cursor was born a minor eternity ago in AI time. It was founded in early 2022, months before ChatGPT’s blockbuster debut. But even then AI’s breakthrough potential was clear to attentive nerds. Truell—then an undergrad at MIT—saw it, as did his classmates Aman Sanger, Sualeh Asif, and Arvid Lunnemark: If you made models bigger, gave them more data and more computing firepower, the results looked less like an experiment and more like a product.
As Truell and his cofounders started building what became Cursor, it became clear they had the opportunity to reshape one of the most essential activities in tech: coding, the process by which software gets built. Truell—who had started coding at age 11 to make his own mobile games— remembers sitting on a plane, with a moment to himself, shortly before Cursor’s initial release.
“I remember thinking: ‘I really, really, really think this is going to work,’” he says. “It seemed clear to all of us that how people build things on computers was going to flow through AI in the future.”
Cursor, originally, was a remarkably effective code completion tool, accurately predicting how a programmer would finish a line of code, and thus saving developers enormous amounts of time. The code completion tool existed in its own integrated development environment, or IDE—an interface that collects important tools in one place and speeds up software development. IDEs date back to the 1960s, and while other AI coding efforts were out there (like Microsoft’s GitHub Copilot), Cursor had reimagined the IDE for the AI era.
“We wanted to have our own app, our own development environment,” says Truell. “And we needed the ability to edit anything on the screen, and guide developers progressively through each jump.”
Anysphere—the original name of the company Truell and his cofounders started—released Cursor in March 2023. Developers are an opinionated, fickle fan base, looking to use the newest, hottest thing. By late 2023 that was Cursor. By that November, Cursor had indexed 150,000 codebases, and usership was rocketing upward; the company then raised a June 2024 $60 million Series A, led by Andreessen Horowitz.
In May 2025, Cursor’s annualized revenue hit $500 million; by October, that had doubled to $1 billion. This, to say the least, is not normal—or at least it wasn’t before the AI boom. The story intensified as venture capital dollars poured in: Through 2025, Cursor raised three more rounds of funding, raking in a wild $3.3 billion. Its valuation started the year at $2.5 billion and ended the year at nearly $30 billion. “I’d argue that if you subtract out the dollars invested, it’s the fastest-growing company we’ve ever seen,” says Martin Casado, Andreessen Horowitz general partner and Cursor board member.
“If you subtract out the dollars invested, it’s the fastest-growing company we’ve ever seen.”
Martin Casado, General Partner, Andreessen Horowitz
In a market filled with incumbents, including tools from Microsoft, Google, and Amazon, this was shocking. But developers frequently preferred working with Cursor, which helped automate tasks, shined on large projects, and had a beloved IDE.
“They were the first and biggest product in the coding AI space entirely,” one Cursor investor says. “They made the space a thing.”
But what made Cursor the defining company in that space now makes its future fragile.
From fuel to frenemy
Cursor has, from the beginning, been entwined with the major AI labs. Early investment came from OpenAI’s Startup Fund, and the product leveraged OpenAI’s and Anthropic’s models. But there was always a sense that Anthropic and OpenAI had their own designs on the phenomenally large coding market.
So when Anthropic launched competitor Claude Code as a “research preview” in February 2025, it wasn’t surprising. Developers took to it slowly, until it all happened at once. What had changed wasn’t just a product. It was a whole new way of coding.
The key was Anthropic’s deployment of agentic AI. Cursor helps humans write code faster; Claude Code writes the code for you. Developers give it instructions, and it creates and changes a whole lot of code autonomously. This isn’t to say Cursor can’t write code for you—within Cursor itself, agents write 100% of the company’s code—but that’s not its most discussed use case. More broadly, the difference between using Cursor and Claude Code is the difference between Tony Stark wearing the Iron Man suit, and Stark’s AI assistant JARVIS wearing it for him—while Tony moves on to the next problem.
“We invented agentic coding as a thing,” says Boris Cherny, Anthropic’s head of Claude Code. “It was useful for Anthropic, and as it turns out, useful for customers.”
In May, Anthropic released its Sonnet 4 and Opus 4 models, making its agents more powerful and kicking off a Claude Code frenzy. By the beginning of 2026, Claude Code—with a $2.5 billion run rate and over 300,000 business customers—was a jewel in Anthropic’s $380 billion crown.
Suddenly, no matter how decisively Cursor had risen, social media bubbled with the idea it could fall. In February, a string of tweets emerged around a startup called Valon deciding to stop using Cursor, kicking off the “Cursor is dead” narrative. The social media discourse was capturing a simmering vibe shift, that the future of coding was not the IDE but autonomous agents. The zeitgeist was moving on.
“I don’t believe the ‘Cursor is dead’ memes, but ‘The IDE is dead’ is real,” says Zach Lloyd, CEO and founder of Warp, a coding competitor. “That’s just not how software is being built now.”
Cursor president Oskar Schulz acknowledges this. “In people’s minds Cursor stands for the IDE,” he says. “The IDE isn’t the right form factor anymore for a world where you can produce 10 times more code.” Indeed, Cursor launched agentic capabilities in its platform in 2024, and Schulz emphasizes that today, “95% of Cursor users are agent users.”
Claude’s rise is hardly making Cursor disappear. When Fortune spoke to six developers and founders about AI coding tools, it was clear that Cursor and Claude Code lend themselves to distinctly different use cases—and that many developers rely on both. The same seemed to be true at the enterprise level. Invariably, everyone described using some combination of Cursor, Claude Code, OpenAI’s Codex, and others.
Cursor’s valuation was $2.5 billion at the start of 2025; by the end of the year it was nearly $30 billion.
This dynamic keeps the market open to accommodate several winners. For the moment. “I don’t think this is a winner-take-all. It’s a winner-take-some, or a winner-take-most,” says Cherny.
But, of course, the size of the market is what makes the stakes high. And make no mistake: There is an all-out business war for the future of coding. OpenAI’s Codex has been catching up, Claude Code is beloved, and Cursor is in a genuine bind. On top of concerns around how Cursor will evolve for the age of agentic coding, it has a pricing problem. Anthropic has used its financial firepower and model provider advantage to offer Claude Code at lower prices than Cursor reasonably can match. Cursor effectively pays retail to access the models that Anthropic gets wholesale. “Anthropic is trying to drown out Cursor,” one VC tells Fortune.
To wean itself from dependence on other models, Cursor has been building and training its own model, Composer, since 2025. Composer has performed better than Anthropic’s Opus 4.6 on some benchmarks (and though Composer 2 came in behind OpenAI’s GPT 5.4, it is very cost-efficient). The news suggests Cursor is figuring it out.
That said, training and maintaining models of your own are astronomically expensive endeavors, requiring technical talent that’s hard to find outside OpenAI and Anthropic. Cursor has also recently suffered attrition of key talent, including engineers Jason Ginsberg and Andrew Milich, who defected to Elon Musk’s xAI. (Cursor declined to comment on the departures.)
“Cursor’s in a tough spot,” one backer says. “On one hand, what they’ve done really well is they’ve made a product that everybody likes. On the other…burning $1 to make 90 cents isn’t a business.”
The next moves
When you talk with Truell and Schulz about their company’s doom narrative, they both essentially say: “Reports of our death are greatly exaggerated.”
“We are expecting to disrupt ourselves over, and over, and over again,” says Schulz. “We’re perplexed by this continuous flow of ‘You’re going to be dead tomorrow.’ We’ve always heard that.” That’s also true for dozens of other VC-backed startups who now compete with OpenAI and Anthropic in the coding space.
Investors disagree about Cursor’s likely fate. Some say the only natural end point is an IPO, which would require the company to get its unit economics majorly in order. Others say it could be a mega-acquisition from OpenAI, which reportedly looked into acquiring Cursor early last year.
For Truell’s part, he says he wants to build a “long-lasting, independent, generational company” focused entirely on professional developers. He started this knowing he’d have to run a marathon fast. “In our industry, taking the long view is underrated,” he says. “We knew from the start the best solution was going to change every six months, every year, and that’s what excited us.”
As Truell and I get ready to end our Zoom call, I notice the picture of Caro again. I think about how it took Caro six months to edit a single chapter of The Power Broker. Truell has less time than that before the next change.
This article appears in the April/May 2026 issue of Fortune with the headline “Cursor’s crossroads: The rapid rise and uncertain future of a red-hot AI startup”
