Why Cursor’s CEO believes OpenAI, Anthropic competition won’t crush his startup

Anysphere, the company that makes AI coding assistant darling Cursor, isn’t thinking about an IPO any time soon, its co-founder CEO Michael Truell said onstage Monday at Fortune’s AI Brainstorming conference.

After reaching $1 billion in annualized revenue in November and raising $2.3 billion at a $29.3 billion valuation last month, Truell said his company is instead focused on building out more features.

For instance, he noted that Cursor’s homegrown LLMs were geared to support specific products. Cursor also confirmed the existence of those models in November when it said in a blog post, “Our in-house models now generate more code than almost any other LLMs in the world.”

His comments about the models came up at Fortune’s event when the founder was asked how he plans to compete with the LLM makers that he relies on when the major ones — OpenAI, Anthropic — have their own AI coding offerings.

Truell likened their coding products to “a concept car,” whereas his product is a production automobile.

“It would be like taking an engine and a concept car around it instead of a whole end-to-end car that was manufactured,” Truell said. “What we do is we take the best intelligence that the market has to offer from many different providers. And we also do our own product-specific models in places. We take that, we build it together and integrate it, then also build the best tool and end UX for working with AI.”

Cursor’s dependence on its competitors — and its need to build its own LLMs — has been a subject of speculation among VCs in Silicon Valley since earlier this year when OpenAI reportedly looked at Anysphere as an acquisition target. Anysphere turned the idea down. (This was around the same time that Windsurf’s OpenAI deal also didn’t materialize, with the founder eventually joining Google.)

The issue, investors told TechCrunch, was that AI coding editors were losing money thanks to high costs they paid to the model makers. In Cursor’s case, instead of selling, it adjusted pricing to a usage model in July, directly passing along the API fees that model makers charge to its users. This change from an all-inclusive subscription fee (and the surprise big bills some customers faced) caused an uproar among some of its users.

On Monday, when asked about the pricing kerfuffle, Truell said, “When we started Cursor, you would turn to Cursor for a quick JavaScript question and now you’re turning to it to do hours of work for you. So the pricing model had to shift for us and others in the space. That means shifting more towards a consumption model,” he said.

Truell added that one of the tools the company is working on is cloud-computing-like cost-management tools, which lets enterprises monitor their total usage and keep tabs on the bills their engineers are running up.

“We have a whole team internally dedicated to enterprise engineering and building things like spend controls and billing groups and visibility,” he said.

Additionally, he said Cursor is focused on two major areas for the next year. One is handling more complex agentic functions.

“We want you to take end-to-end tasks, ones that are concise to specify but then are really hard to do, and have them entirely be done by Cursor. An example is a bug fix,” Truell explained.

He particularly wants Cursor to be able to fix the kinds of bugs that might be easy to describe but take “weeks of someone’s time, thousands of times running the code” to handle. “We want Cursor to do that, end-to-end,” he said.

The other area he named, but didn’t explain with much detail, was the idea of “thinking about teams as the atomic unit that we serve,” he said. This must be in contrast to serving individual coders, and a hint to how well its enterprise business is going.

In addition to cost-monitoring features, Truell said he wants Cursor to handle more parts of the software development life cycle outside of writing code. He pointed to Cursor’s code review product as an example, which he said is being used by some customers to analyze every pull request, be it written by AI or human. (A pull request is when a programmer submits code for review before it is merged into the main project.)

“So you’ll see us start to help teams more as a whole,” with more features like that, he promised.

Meanwhile, big competitors are also all gearing up for the complex-task agentic world. Amazon just released a coding tool it promises can already run for days on end.

Just this week, the AI power players, including Anthropic, OpenAI, Microsoft, AWS, and many others, launched a new consortium under the Linux Foundation to develop open source agentic interoperability standards. They even contributed some of their key projects, like Anthropic’s wildly popular Model Context Protocol (MCP).

His plans for the year likely won’t put Anysphere firmly ahead of Cursor’s main model-maker competitors. They should, however, keep the company in the race.