Cursor hits $9B valuation

Original Article ↗ Hacker News Discussion ↗

What Cursor Is (and Whether It’s “Vibe Coding”)

  • Many argue calling Cursor a “vibe coding app” is reductive; they see it as a serious IDE with deeply integrated AI, primarily for autocomplete and agentic edits with human review.
  • Others accept “vibe coding” as an accurate label for a growing use case: non‑experts or bosses pushing teams to “use AI” and people letting agents write large chunks of code with minimal scrutiny.
  • There’s disagreement on the term itself: some define vibe coding as careless delegation, others as any AI-assisted coding, so people often talk past each other.

Moat, Competition, and Microsoft Risk

  • Strong skepticism that Cursor has a defensible moat: it’s a VS Code fork, there’s minimal lock‑in, and switching costs between AI tools are seen as low.
  • Counterpoint: current user growth, UX advantage, and autocomplete quality (Cursor Tab) are viewed by some as a temporary moat.
  • Big perceived risk: Microsoft/GitHub can undercut on price, control the official VS Code marketplace, and quickly copy features, similar to what’s alleged with Teams vs. Slack.
  • Several free/open competitors are cited: VS Code extensions (Cline, Roo Code, Kilo), CLI/agent tools (Aider, Plandex, Claude Code, others), and alternative IDEs like Augment and Windsurf.

Product Quality and Workflow Opinions

  • Fans report Cursor is dramatically better than GitHub Copilot and stock VS Code for both inline completion and large edits, especially in terms of UI speed and ergonomics.
  • Critics say Cursor is context‑limited, forgets changes, and is weaker on some stacks; some prefer Augment, Claude Code, or open‑source agents, especially for large codebases.
  • There’s a split between people who mainly value inline Tab completion vs. those who mostly care about agentic, chat‑driven workflows.

Valuation, Economics, and Bubble Concerns

  • A $9B valuation on ~$200M ARR (≈45x) is widely seen as “bubble” territory; comparisons are drawn to Clubhouse, Hopin, and Inflection AI.
  • Doubts center on unit economics (LLM costs vs. $20/month pricing), lack of lock‑in, and ease of churn if a better or cheaper tool appears.
  • Others point out strong growth, real revenue, and investor “vibes investing” in AI as context.

Security, Licensing, and Platform Dependence

  • Concern raised that Cursor’s frozen snapshot of the VS Code marketplace leaves some extensions with unpatched CVEs; this is acknowledged upstream but unresolved.
  • Debate over whether this stems from Microsoft’s licensing barriers or Cursor’s use of another company’s infrastructure without permission.
  • Some see this, plus Microsoft’s recent enforcement against forks, as another strategic vulnerability for Cursor.