In a surprising 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 agreement 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. The deal marks Elon Musk's strategic move to bridge the gap with competitors in the AI coding tools sector, an area where his company, xAI, is currently lagging behind. The acquisition is contingent upon SpaceX's planned initial public offering, which aims for a $2 trillion valuation.
Notably, the $10 billion breakup fee will be paid if the full acquisition does not proceed. In 2022, Alameda Research, founded by Sam Bankman-Fried, invested $200,000 in Anysphere, the company behind Cursor, acquiring a 5% stake at a $4 million valuation. However, after FTX's collapse, the court-appointed estate sold the stake for the same amount, resulting in a substantial loss for creditors.
The 15,000x return on investment highlights the significant value destroyed by the estate's asset liquidation. This incident has sparked controversy, with Bankman-Fried arguing from prison that the estate's rapid asset liquidation destroyed billions in value, and that customers could have received more than their initial investments if the assets had been held. The trajectory of Cursor's valuation, from its AI coding product launch in 2023 to its current valuation, is one of the steepest in software startup history.
Although FTX customers have been repaid in full, they have not benefited from the substantial upside of the assets sold during the bankruptcy. The case of the Cursor stake, now valued at $3 billion, serves as a prime example of the potential value destroyed by the estate's actions.