In April 2023, FTX's estate sold a 5% stake in AI coding startup Cursor for $200,000, a valuation that has skyrocketed to approximately $3 billion following SpaceX's agreement to acquire the company at a $60 billion valuation. This development has brought attention to the significant losses incurred by FTX's creditors due to the estate's asset liquidation during the bankruptcy process. The initial investment in Cursor was made by Alameda Research in April 2022, with FTX later selling the stake for the same amount, resulting in a substantial missed recovery opportunity. The acquisition deal is part of Elon Musk's efforts to enhance SpaceX's AI capabilities, particularly in the area of AI coding tools, where the company is currently lagging behind competitors.
The transaction is contingent upon SpaceX's planned initial public offering, which is expected to reach a $2 trillion valuation. Meanwhile, the FTX estate's decision to liquidate assets has been a subject of controversy, with Sam Bankman-Fried arguing that the process destroyed billions of dollars in value and that customers could have been fully repaid if the assets had been held instead of being sold. The significant increase in Cursor's valuation serves as a prime example of the potential value that could have been realized if the estate had adopted a different approach to asset management during the bankruptcy process.