A 5% stake in AI coding startup Cursor, which bankrupt FTX sold for $200,000 in April 2023, would be worth about $3 billion today, following SpaceX’s deal this week to acquire the company at a valuation of $60 billion.
SpaceX said Monday it has the right to buy Cursor later this year for $60 billion or pay $10 billion if the full acquisition doesn’t happen. The deal is a move by founder Elon Musk to close the gap with OpenAI and Anthropic in AI coding tools, an area where he recently said xAI, the Musk-led AI company that merged with SpaceX, was lagging behind its competitors.
SpaceX is delaying any immediate acquisition due to its planned IPO targeting a $2 trillion valuation, with the $10 billion serving as a breakup fee.
The crypto angle can be found in the cap table. In April 2022, Alameda Research, the trading company founded by Sam Bankman-Fried and run alongside FTX, invested $200,000 in Anysphere, the company building Cursor.
This investment acquired approximately 5% of the company at a valuation of $4 million. A year later, FTX had collapsed, Alameda and FTX were bankrupt, and the court-appointed estate sold Cursor’s stake for the same $200,000 paid by Alameda.
The stake is worth $3 billion at SpaceX’s price of $60 billion, meaning the gap between what the FTX domain received and what the position would earn today is about 15,000 times the yield. Instead, this was achieved by whoever bought it out of bankruptcy rather than the creditors for whom the estate was intended to maximize recovery.
The timing is embarrassing for FTX’s bankruptcy administration.
Bankman-Fried, who is currently serving a 25-year federal sentence, has spent the last year arguing from prison that the FTX estate destroyed billions in value by liquidating assets too quickly during bankruptcy, and that customers might have been more than whole if the process had held positions instead of selling them at what turned out to be the lowest of crypto prices.
In February, he shared a projection suggesting that FTX’s net asset value would have reached $78 billion if the estate had retained assets during the subsequent recovery rather than selling them in 2023 and 2024.
Cursor launched its AI coding product in early 2023, the same year the field sold the stake, and the company’s trajectory from that launch to its current valuation three years later is among the steepest in software startup history.
FTX customers have since been repaid in dollar terms as part of the bankruptcy distribution plan, recovering the value of their claims plus interest. What they didn’t receive was the benefit of what those assets became between the bankruptcy filing and today, which in the case of Cursor’s stake alone represents about $3 billion in lost recovery versus $200,000 realized.
Bankman-Fried’s parents publicly advocated for a pardon, appearing on CNN in March, saying that FTX’s customers had ultimately been refunded and that the case against their son should be reconsidered. The Cursor number will likely feature prominently in the family’s continuing campaign and in Bankman-Fried’s own letters from prison, as the clearest example of the type of value he claims the forced sale destroyed.
