In a stunning turn of events, a 5% stake in AI coding startup Cursor, sold by FTX's bankruptcy estate for $200,000 in April 2023, would now be worth approximately $3 billion following SpaceX's acquisition of the company at a $60 billion valuation. This development has brought to light a massive missed recovery in crypto history.
SpaceX's agreement to acquire Cursor is part of Elon Musk's strategy to close the gap with competitors in the AI coding tools space. The deal is pending, with SpaceX having the option to purchase Cursor for $60 billion or pay a $10 billion breakup fee. The crypto connection lies in Alameda Research's $200,000 investment in Anysphere, the company behind Cursor, in April 2022. This investment, which represented a 5% stake in the company, was sold by the FTX estate for the same amount a year later, following the collapse of FTX and Alameda.
The significant difference between the sale price and the current valuation of the stake has sparked debate about the timing and handling of the bankruptcy administration. Sam Bankman-Fried, currently serving a 25-year federal sentence, has argued that the estate's decision to liquidate assets too quickly destroyed billions in value, and that customers could have received more than their initial investments if the process had been handled differently. The trajectory of Cursor's valuation, from its launch in early 2023 to its current value, is one of the steepest in software startup history. While FTX customers have been repaid in full, they did not receive the upside from the assets sold during the bankruptcy, including the significant increase in value of the Cursor stake.