The artificial intelligence startup Cursor raised $2.3 billion in new funding, bringing the company's valuation to $29.3 billion

The artificial intelligence startup Cursor (which helps engineers write code) has raised $2.3 billion in a new funding round, bringing the company's valuation to $29.3 billion.

Cursor can analyze programmers' actions and suggest the next few lines of code. It also offers a chatbot that users can ask code-related questions. This valuation is astonishing for a startup that was valued at less than $10 billion just a few months ago, highlighting investors' ongoing and strong interest in all things AI. Advances in generative AI have driven the valuations of a whole generation of coding companies utilizing this technology, such as Replit, Sweden's Lovable, and Cognition. However, they face challenges, like many AI products, related to costs. AI coding companies must pay to build or access AI models to support their applications. Some venture capitalists expect these costs to decrease, and that customers will be willing to pay a premium for AI applications that provide more value.