The value of a 5% stake in AI coding startup Cursor, sold by FTX's bankruptcy estate for $200,000 in April 2023, 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 gap between the initial sale price and the current worth of the stake. SpaceX has announced its intention to purchase Cursor later this year for $60 billion, or pay $10 billion if the full acquisition does not proceed, as part of Elon Musk's efforts to close the gap with competitors in AI coding tools. The deal is pending due to SpaceX's planned initial public offering, which targets a $2 trillion valuation.
The crypto aspect of this deal lies in Alameda Research's initial $200,000 investment in Anysphere, the company behind Cursor, in April 2022. This investment, which represented a 5% stake in the company at a $4 million valuation, was sold by the FTX estate for the same amount a year later, following the collapse of FTX and Alameda. The significant increase in the stake's value, representing a 15,000x return, has raised questions about the timing of the sale and the potential loss for FTX's creditors. Sam Bankman-Fried, currently serving a 25-year federal sentence, has argued that the estate's decision to liquidate assets too quickly during the bankruptcy destroyed billions in value, and that customers could have been made whole if the process had held positions instead of selling them at the bottom of crypto prices.
The Cursor stake's trajectory, from its launch in early 2023 to its current valuation, is among the steepest in software startup history. While FTX customers have been repaid in dollar terms under the bankruptcy's distribution plan, they did not receive the upside from the assets' increased value between the bankruptcy filing and now, including the $3 billion forgone recovery from the Cursor stake.