- FTX missed out on $500 million by selling its Cursor investment for the original $200,000.
- Thrive Capital and other top firms led a $900M round, showing confidence in Cursor’s growth.
- FTX’s failure to capitalize on Cursor’s growth led to financial losses during bankruptcy.
FTX Exchange gave up $500 million in potential earnings from its early investment in Cursor, an AI-powered code editor. FTX’s financial stakeholders now face the complete loss of their investment in the Cursor entity. The funding round, combined with growing valuation, transformed into a disastrous decision for FTX, which resulted in the loss of investment stake.
In 2022, Alameda Research, a subsidiary of FTX, invested $200,000 in the startup Cursor. Since then, the value of that investment has grown significantly, with estimates placing it at around $500 million due to rising market valuations. However, during the FTX bankruptcy proceedings, liquidators sold the stake in Cursor for its original purchase price of $200,000.
Cursor’s $900M Investment Round
The $900 million investment round resulted in Cursor’s market value of $9 billion. The funding round was led by Thrive Capital alongside a16z, Accel, and other leading venture capital firms. After successfully funding OpenAI, Thrive Capital demonstrates faith in Cursor’s future AI and technological developments. The recent funding round shows strong backing for Cursor’s future expansion plans.
Anysphere Inc.’s Cursor application has experienced significant growth in user numbers since its first launch. The platform applies AI technology to execute coding operations, enabling developers to accomplish their work effectively. As part of CURSOR’s toolkit, users can employ an AI-powered chatbot to build and modify code using natural language. The revolutionary methodology enabled Cursor to secure a prominent position in the technological market.
Earlier this year, OpenAI failed to acquire Anysphere, the company behind the AI coding assistant Cursor. After the deal fell through, OpenAI redirected its focus toward acquiring Windsurf for a maximum estimated value of $3 billion. Meanwhile, Cursor pushes ahead with its growth as an essential participant in AI-powered coding.
FTX’s Strategic Misstep
FTX lost extensive financial value by not maximizing the returns from its investment in Cursor. The platform’s recovery efforts would have benefited tremendously if FTX had maintained possession of its stake. FTX’s failure to capitalize on its investment reflects the company’s inadequate handling of valuable assets.
Related: All Eyes on May 30: FTX Repayments Could Mark Market Bottom as SEC Stalls ETF Reviews
The $500 million Cursor investment loss further strained FTX’s already complex bankruptcy process. The company’s ongoing bankruptcy proceedings suffer because of its inability to leverage high-value assets like Cursor. This misstep contributes to the growing uncertainty faced by FTX creditors, who now face prolonged delays and reduced expectations for recovery.
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