>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.

> 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.

> 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.

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

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?

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.

"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.

Revenue is not the same as cashflow.