Cursor Raised $2.3B in 5 Months, but the Math Doesn’t Work.
I’ve been enjoying building simple apps with Cursor. The product works. It’s genuinely impressive how quickly you can get something working…
I’ve been enjoying building simple apps with Cursor. The product works. It’s genuinely impressive how quickly you can get something working if you know what you’re doing. After writing hundreds of thousands of lines of code over 20+ years, I recognize when a tool delivers real value.
But when I traced the actual value flow behind this tool, I found something deeply troubling. This isn’t a sustainable business. It’s a VC-subsidized wealth transfer mechanism that’s extracting value from every layer of the stack except the customer.
Let me show you the numbers.
The Economic Reality Nobody’s Talking About
Here’s what actually happens when you use Cursor:
The Value Chain:
Customer pays: 2 units
Cursor pays OpenAI: 5 units (2 from customer, 3 from VC)
OpenAI pays Microsoft: 10 units (5 from customers, 5 from VC)
Microsoft spends upstream: 50 units broken down as:
30 units → NVIDIA (GPUs)
10 units → AMD and alternative accelerators
5 units → Energy providers
3 units → Cooling and networking infrastructure
2 units → Datacenter operations and real estate
