Anysphere Inc., the startup behind the popular Cursor code editor, has reportedly raised $900 million in funding. 

Sources told the Financial Times late Sunday that Thrive Capital led the investment. The venture capital firm previously led OpenAI’s $6.6 billion raise last year. Thrive Capital was reportedly joined by Andreessen Horowitz, Accel and other backers.

It’s believed Anysphere is now worth $9 billion, up from $2.5 billion following a January funding round. The valuation jump is likely related to the rapid sales growth the company is experiencing. Its annual recurring revenue reportedly topped $200 million last month.

Cursor, Anysphere’s flagship code editor, has a split-screen interface: one panel displays the user’s code while the other provides access to an artificial intelligence chatbot. Developers can instruct the chatbot to make code changes with natural language prompts. The underlying AI is capable of generating multiple lines of code at once.

When it’s given a challenging task, Cursor can look for additional information on the web and in a software project’s documentation. It breaks down the work into smaller steps to ease processing. After Cursor suggests a code change, users can click an Apply button in the chatbot sidebar to apply the update to their code base.

Anysphere provides specialized modes for situations where developers may wish to use Cursor differently. A Manual mode allows users to highlight the specific lines of code in which Cursor should make a change. Usually, the tool automatically determines which code should be modified to implement a change requested by the user. There’s also an Ask mode that can help developers familiar themselves with a code base.

Under the hood, Cursor is powered by language models from OpenAI, Google LLC and other providers. Last year, Anysphere added an internally developed model dubbed Cursor-Fast. The company stated at the time that the model’s coding capabilities are between GPT-3.5 and GPT-4.

A job posting on Anysphere’s website hints that it plans to train more custom coding models. The company is seeking a research engineer who can help it build mixture of experts, or MoE, algorithms. A MoE algorithm comprises multiple neural networks that each focus on a narrow set of tasks. When it receives a prompt, the algorithm only uses one neural network to generate output, which saves hardware resources by removing the need to activate the other neural networks.

Developing AI models is a costly endeavor. Anysphere’s reported funding round should make it easier for the company to finance AI development projects. Additionally, integrating more custom models into Cursor could help Anysphere boost profit margins by reducing its reliance on AI providers such as OpenAI. Those companies charge premium rates for the reasoning models that generate the highest-quality code.

The ChatGPT developer reportedly made an unsuccessful attempt to acquire Anysphere earlier this year. Last month, reports emerged that OpenAI is seeking to buy a competing programming automation provider called Windsurf. It’s believed the latter company, which is incorporated as Exafunction Inc., could fetch up to $3 billion in an acquisition.

Image: Anysphere