Things people aren&#x27;t talking about enough: Cursor’s rapid growth, its role as an AI coding harness, and the data and training advantages that may support its moat. With the reported SpaceX and xAI deal, there&#x27;s a real possibility of combining Cursor with Grok and large-scale compute. ------ TIMESTAMPS 0:00 The Cursor Story 1:54 The Harness Moat 4:51 Budgets and Data 8:59 The Deals 12:31 The Vision 14:58 Concerns 17:23 Final Takes ------ 🌌 LIMITLESS HQ ⬇️ NEWSLETTER: https://limitlessft.substack.com/ FOLLOW ON X: https://x.com/LimitlessFT SPOTIFY: https://open.spotify.com/show/5oV29YUL8AzzwXkxEXlRMQ APPLE: https://podcasts.apple.com/us/podcast/limitless-podcast/id1813210890 RSS FEED: https://limitlessft.substack.com/ ------ RESOURCES Josh: https://x.com/JoshKale Ejaaz: https://x.com/cryptopunk7213 ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

The Story of Cursor: The Fastest AI Company and Massive Comeback

Limitless: An AI Podcast

# Full Transcript

**Podcast:** Limitless: An AI Podcast

## Participants

- **Josh** (None)

## Transcript

The Story of Cursor is quite possibly the greatest comeback story in the history of AI. Just 90 days ago, some of the smartest people in tech had completely buried this company. They gave up on it. And Cursor was just an AI rapper that had raised too much money and Anthropic was about to crush them. Then seemingly overnight, everything changed. If you look back to January of last year, they were running at about $100 million in ARR. Fast forward to today, that number is $3 billion. This is one of the fastest software ramps in history. Way faster than OpenAI. So why?

And on this episode, we're going to discover the moat that just about every single critic on the internet missed. To truly understand how impressive of a run up Cursor's had, we have to start from the beginning. So Cursor was founded by four MIT graduates in 2022. Their founder, Michael Trull, is only 25 years old right now. He was 23 when it was founded. So it's an incredibly young team. All four of these founders, by the way, are on the Forbes 30 under 30 list. So massively successful young company.

But what were they building? Well, they discovered a problem. If all these new AI models like Claude, like ChatGPT, could code for people, you would still need some sort of a system, some form of a harness, some form of a coding editor to be modernized around new AI coding models. Traditionally, you would have an IDE, an integrated developer environment, and you would use this to kind of like edit your software, see what the code looks like in reality, like right next to it, side by side screen.

But there was nothing quite for that when it came to coding AI models. Cursor wanted to be that. And so they forked VS Code, which is a popular open source software program from Microsoft, and they created what critics ended up calling it a wrapper, a harness around AI models.

Now, initially, the criticism was, this is just an AI wrapper, and the actual brain, the AI models are the smartest thing and the most valuable thing. And they'll eventually replace the wrapper that actually didn't didn't end up happening. If you look at this crazy growth curve that we have on the screen right now.

Now, they started off in Jan 2025 with $100 million ARR, that then 5X'd a few months later at $500 million. And then by the end of 2025, they were at $1 billion. And then we just got the news this week that they hit $3 billion. Now, what's crazy about this is their projection for the end of this year is $6 billion. I actually think they might kind of blow the roof on this entirely.

It sounds similar to Anthropic, because Anthropic started with Claude Code, and they had this kind of like meteoric exponential rise. The same thing is happening with Cursor, but they have a very different mode. 67% of the Fortune 500 companies all use Cursor. And they went from being the hottest commodity to the most crit...

The Story of Cursor: The Fastest AI Company and Massive Comeback

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
edge in conversations you're not hearing.

The Story of Cursor: The Fastest AI Company and Massive Comeback

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.