The AI coding startup Cursor just raised $2.3 billion in a new funding round, catapulting its valuation to a whopping $29.3 billion.
That’s nearly 12 times what the company, founded by four MIT graduates in their mid-20s, was worth less than a year ago (in January).
Cursor's tool, which learns a developer's coding style to help autocomplete, edit, and review lines of code, has earned a cult following from professional engineers and top tech CEOs, including NVIDIA’s Jensen Huang.
This latest funding round is the company's third this year and was co-led by Accel and Coatue, with new investors Google and Nvidia. The startup, which lets users toggle between models from OpenAI, Anthropic, and Google, also recently launched its own model, "Composer."
But what does this valuation for a coding tool mean for the rest of the business world? To learn more, I turned to Marketing AI Institute and SmarterX founder and CEO Paul Roetzer on Episode 180 of The Artificial Intelligence Show.
A Big Market and Growing
Roetzer says Coder’s success is a sign of a much larger shift in how all software is built.
All the major AI labs are using similar tools internally to augment, write, and improve their own code. This allows them to build and update their software products at a much faster pace.
This will trickle-down and affect everyone in business, not just software developers.
That’s because tools like this are empowering people who aren't coders, Roetzer explains. For the first time, non-coders or those who are not tech savvy will be able to build apps, maybe even build companies with the help of Coder’s tool.
It’s this ability to support non-developers that signals a huge expansion of the market. Roetzer notes a recent interview where Microsoft CEO Satya Nadella acknowledged that while Microsoft has long dominated coding tools, Cursor is making the market “so much bigger.”
This explosive growth is expected to continue as AI becomes more deeply integrated into the fabric of software creation.
“I think companies like this are going to just keep growing,” Roetzer says, “and everybody's going to want to play in this game.”
Mike Kaput
Mike Kaput is the Chief Content Officer at SmarterX and a leading voice on the application of AI in business. He is the co-author of Marketing Artificial Intelligence and co-host of The Artificial Intelligence Show podcast.