A previously overlooked stake once tied to the collapsed crypto exchange FTX may now be worth roughly $500 million, following a sharp rise in valuation at one of Silicon Valley's hottest AI startups.

What Happened: Anysphere, the company behind the AI-powered code-writing assistant Cursor, has raised $900 million in new funding, tripling its valuation to $9 billion, Financial Times reported.

This surge comes just months after FTX creditors offloaded their equity interest in Anysphere for only $200,000, according to a person familiar with the matter.

The massive valuation jump underlines just how costly distressed asset sales can be — and how rapidly AI start-ups are inflating in value.

The new round was led by Thrive Capital, a backer of OpenAI, with participation from Andreessen Horowitz and Accel, according to people close to the deal.

Founded in 2022 by MIT alumni, Anysphere was last valued at $2.5 billion in January, when it raised $105 million from many of the same investors.

Its flagship product, Cursor, has become popular with software engineers for enabling natural language-based coding and suggesting near-complete code blocks, often replacing manual development work.

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The company reportedly reached $200 million in annual recurring revenue by April, making it one of the fastest-growing software firms in the space.

Cursor is already used by developers at major tech companies including OpenAI, Stripe and Spotify.

Anysphere's rise comes amid broader investor enthusiasm for AI application developers, who are attracting attention now that valuations for foundational model builders like OpenAI and Anthropic have soared beyond the reach of most investors.

According to Dealroom.co, AI application start-ups attracted $8.2 billion in funding in 2024, more than double the previous year.

What’s Next: The dramatic revaluation of Anysphere also spotlights a growing concern among some venture capitalists: that rapid revenue growth may stem more from short-term AI experimentation than from long-term, durable enterprise adoption.

Cursor, which Anysphere claims powers close to a billion lines of code daily, competes with offerings such as GitHub Copilot and has gained attention from high-profile technologists like Andrej Karpathy, who described using Cursor as entering a "vibe coding" trance.

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