In a notable 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 recent agreement to acquire the company at a $60 billion valuation. This development comes as SpaceX, led by Elon Musk, seeks to bolster its position in AI coding tools, an area where the company currently lags behind competitors such as OpenAI and Anthropic.
The acquisition is part of Musk's strategy to enhance xAI, the AI company merged with SpaceX, which he believes is behind in the industry. The deal is structured to allow SpaceX to either purchase Cursor for $60 billion later this year or pay $10 billion if the full acquisition does not proceed, with the latter serving as a breakup fee.
This decision is influenced by SpaceX's planned initial public offering, which aims for a $2 trillion valuation. The connection to the crypto world lies in Alameda Research's $200,000 investment in Anysphere, the company behind Cursor, in April 2022. This investment, which represented about 5% of the company at a $4 million valuation, was sold by the FTX estate for the same amount after FTX's collapse. The significant disparity between the sale price and the current valuation underscores the potential value that could have been realized by FTX's creditors.
This situation adds weight to the arguments made by Sam Bankman-Fried, currently serving a 25-year federal sentence, that the FTX estate's rapid liquidation of assets during bankruptcy destroyed substantial value. Bankman-Fried has suggested that had the estate held onto these assets, their value could have increased significantly, potentially reaching $78 billion. The trajectory of Cursor, which launched its AI coding product in 2023, is one of the most remarkable in software startup history, with its valuation soaring in just three years. While FTX customers have been reimbursed in full under the bankruptcy distribution plan, they did not benefit from the potential upside of the assets sold during the bankruptcy process.
The case of the Cursor stake, now valued at $3 billion, stands out as a prime example of the value that could have been recovered. This development is likely to feature prominently in ongoing discussions about the handling of FTX's assets during its bankruptcy.