Cursor, an AI coding startup, is close to securing new funding that would bring in at least $2 billion, according to four individuals with knowledge of the situation. The financing round is anticipated to be led by existing investors Thrive and Andreessen Horowitz, valuing the four-year-old company at $50 billion before the new capital infusion. Two sources indicate that Battery Ventures, a new investor, may also join the round, while one person noted that strategic investor Nvidia is expected to participate as well.

Although the deal is already oversubscribed, the terms are not yet finalized and could still be adjusted. If completed, this funding would almost double Cursor's previous post-money valuation of $29.3 billion, which was established just six months ago.

Despite intense competition from other AI coding tools like Anthropic’s Claude Code and OpenAI’s revamped Codex, Cursor’s revenue is growing quickly. The company projects it will achieve an annualized revenue run rate exceeding $6 billion by the end of 2026, according to two sources. This growth path suggests Cursor expects to at least triple its annualized revenue within the next ten months. In February, the company hit $2 billion in annualized revenue, a figure calculated by extrapolating its most recent monthly sales over a full year.

Similar to many AI coding startups that depend on third-party models, Cursor previously operated with negative gross margins, meaning its product costs exceeded the revenue it generated. However, the launch of its proprietary Composer model last November, combined with the ability to utilize more affordable models such as China’s Kimi, has helped the company reach slight gross margin profitability. Specifically, Cursor now achieves positive gross margins on sales to large enterprises, though it continues to incur losses on individual developer accounts, according to one source.

By reducing its reliance on external providers, Cursor aims to avoid being displaced by its own suppliers, most notably Anthropic, whose Claude Code has become its primary competitor. Cursor and Battery Ventures both declined to comment on the funding round, while Thrive, Andreessen Horowitz, and Nvidia did not respond to requests for comment.

Originally known as Anysphere, Cursor was co-founded in 2022 by Michael Truell, Sualeh Asif, Arvid Lunnemark, and Aman Sanger while they were students at MIT.