In a striking turn of events, FTX's bankruptcy estate sold a 5% stake in AI coding startup Cursor for $200,000 in April 2023, a stake now valued at approximately $3 billion following SpaceX's agreement to acquire the company at a $60 billion valuation. This deal is part of Elon Musk's strategy to bridge the gap with competitors in AI coding tools, an area where his company, xAI, is currently lagging behind. The acquisition is contingent on SpaceX's planned initial public offering, which aims for a $2 trillion valuation, with a $10 billion breakup fee if the full acquisition does not proceed.
The investment in Cursor was initially made by Alameda Research, a trading firm founded by Sam Bankman-Fried, for $200,000 in April 2022, representing roughly 5% of the company at a $4 million valuation. After FTX's collapse, the court-appointed estate sold the stake for the same $200,000, resulting in a missed recovery of approximately $3 billion. This significant loss has sparked debate, particularly from Bankman-Fried, who argues that the estate's rapid liquidation of assets destroyed billions in value, potentially leaving customers with less than they could have received if the assets had been held.
The trajectory of Cursor from its launch in 2023 to its current valuation is one of the steepest in software startup history, underscoring the potential value that could have been realized. While FTX customers have been reimbursed in full plus interest under the bankruptcy distribution plan, they did not benefit from the upside of the assets sold, including the substantial increase in value of the Cursor stake.