[kjksf]

Per latest reporting, Cursor's current annual revenue rate is $4 billion.

So SpaceX is buying 15 years of future cashflows, assuming no change in revenue. Which is bad assumption given past growth was gigantic.

They are also buying 300-400 employees with proven record of training good coding models.

Their expertise will be used to improve Grok Build coding agent.

Also, they're using stock, not cash, so effectively they doubled the amount of money raised.

[ubertaco]

>Their expertise will be used to improve Grok Build coding agent.

Is Grok not a toxic enough brand (by association with Musk) that people who would use Cursor wouldn't avoid Grok?

Like, the assumption seems to be that all the goodwill that Cursor users have towards Cursor will now apply automatically to Grok, which seems like a pretty significant leap.

[indoordin0saur]

I've been teaching myself physics lately and have found Grok to be one of the best both at coming to a correct answer and helping me to understand how to get it myself. It also seems a lot better than other models at saying "I don't know" or pointing out when my question doesn't make sense.

[margalabargala]

I bet any flagship model would do as well if you prompted it with how it should do it.

Comparing grok vs Gemini vs GPT vs Sonnet is like comparing mid-high end CPUs. They're all about as good as one another for most work.

[lmedinas]

Grok has one of the best reasoning and halucination benchmark scores.

[senordevnyc]

I'm a heavy Cursor user, I spend hundreds of dollars per month in overages above my $200 subscription, and I'll be switching away. I have zero interest in Musk's AI.

[porridgeraisin]

Companies using cursor could not care less about the CEO's ideology if they tried. Individuals may, but they don't matter in this context.

[Traster]

The CEOs ideology matters due to the fact it impacts the product design. The reason people don't want to use Grok is because it's bad, and it's bad because the team behind grok have to spend cycles crowbarring in far right white genocide conspiracy theories so that it doesn't embarrass their boss on twitter. One of the things we learned with Anthropic is that you have a lot more success being focused on the core product - coding agent, than trying to do that and chase internet chatbot users.

[porridgeraisin]

As someone that trains LLMs, even if grok does have a "avoid ""woke""" fine-tuning, adding that needs a few thousand examples SFT and a system prompt. It costs nothing extra to do it to coding agents and is not the reason why grok sucks at coding. It's just not in the same league in general - it's 0.5T parameters only and not trained specifically for coding at all.

Even if the way they are doing it did damage coding performance, it is a simple matter of serving another model without that fine tuning in the enterprise API preferably only to the grok coding harness (or cursor, now). Coding performance for subscription plans don't move the needle in terms of revenue anyways and quality there doesn't matter as much.

[esskay]

> They are also buying 300-400 employees with proven record of training good coding models.

Are they? Their Composer 2.5 models is based on Kimi K2.5, it's not a bespoke model.

[shoeb00m]

Achieving the improvements from K2.5 -> composer 2.5 with just post-training is actually more impressive. Though I believe their next model is trained from scratch.

[afavour]

> So SpaceX is buying 15 years of future cashflows, assuming no change in revenue. Which is bad assumption given past growth was gigantic.

I'd argue it's a bad assumption in the opposite direction. There's no moat. People can and will switch tooling and Cursor could easily be left with a steep decline in users.

[dmurvihill]

ARR is best month times twelve, not revenue per year.

[ndr]

Is this what Cursor uses or a standard I'm unaware of?

[an0malous]

I thought it was latest month?

[TrackerFF]

Tbh I don't know if we can use traditional DCF calculations for things like this.

The main challenge is: If models get better, why would humans need a tool like cursor, when they have AI agents doing the coding for them?

[funnym0nk3y]

But revenue is not really the informative quantity. If you sell gold you will have a huge revenue, but very little profit. I can be a trillion dollar company too if we exchange dollar bills for face value.

[chris_money202]

"training good coding models" many would say that is a highly debatable statement, and some would say that is just flat out not true. Cursor has not trained a frontier model from scratch, what they did was take an already made (non-frontier) model and further trained it on their user data about coding outcomes from its coding agent. So, a form of distillation and RL.

[flakeoil]

Revenue is not the same as cashflow.