In a striking 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 valued at approximately $3 billion following SpaceX's acquisition agreement at a $60 billion valuation. This development has brought attention to the significant gap between the initial sale price and the current valuation, with the latter being roughly 15,000 times the former. The acquisition is part of Elon Musk's strategy to enhance SpaceX's AI capabilities, particularly in the area of AI coding tools, where the company currently lags behind competitors such as OpenAI and Anthropic.
The deal is contingent upon SpaceX's planned initial public offering, which is targeting a $2 trillion valuation. The company has the option to purchase Cursor later this year for $60 billion or pay a $10 billion breakup fee if the full acquisition does not proceed. The sale of the Cursor stake by FTX's estate has raised questions about the timing and value realization of the asset, with some arguing that the estate could have maximized recovery for creditors by holding onto the stake rather than selling it at a lower valuation.
This incident has also been cited by Sam Bankman-Fried, currently serving a 25-year federal sentence, as an example of the billions of dollars in value destroyed by the estate's liquidation of assets during the bankruptcy process. Bankman-Fried has consistently argued that FTX customers could have received more than full compensation if the estate had retained assets instead of selling them at the bottom of the crypto market.
The trajectory of Cursor's valuation, from its launch in early 2023 to its current valuation, is one of the steepest in software startup history, underscoring the potential value that could have been realized by FTX's estate and its creditors.