Cursor acquires Graphite to merge AI code writing with review as development bottleneck emerges

Cursor continues acquisition Spree with Graphite deal | TechCrunch

Anysphere, the company behind the AI coding assistant Cursor, announced that it has acquired Graphite, a startup that uses AI to review and debug code. Although the terms of the deal were not disclosed, Axios reported that Cursor paid "way over" Graphite's last valuation of $290 million, which was set when the five-year-old company raised a $52 million Series B earlier this year. The tie-up makes strategic sense. The output of code generated by AI is often buggy, forcing engineers to spend a lot of time on corrections. Even though Cursor offers AI-powered code review through its Bugbot product, Graphite's specialized toolset provides a distinct capability called a 'stacked pull request,' which enables developers to work on multiple dependent changes simultaneously without waiting for approvals. Combining AI-powered code writing with AI-powered code review tools speeds up the process from drafting code to shipping it. Other startups providing AI-powered code review include CodeRabbit, valued at $550 million in September, and a smaller competitor, Greptile, which announced a $25 million Series A this fall. Michael Truell, co-founder and CEO of Anysphere, first met Graphite's co-founders, Merrill Lutsky, Greg Foster, and Thomas Reimers, before launching Cursor as a Neo Scholar, a prestigious program for college students run by Neo, Ali Partovi's early-stage venture firm. Neo backed Graphite at the seed stage, according to PitchBook data. Furthermore, both Cursor and Graphite have other investors in common including Accel and Andreessen Horowitz. Anysphere, which was last at $29 billion in November, has been on an acquisition spree. Last month, it purchased Growth by Design, a tech recruiting strategy company. In July, Anysphere scooped up the talent from AI-powered CRM startup Koala for a post-money valuation of $129 million, according to PitchBook.

Exclusive: Cursor acquires code review startup Graphite as AI coding competition heats up | Fortune

Cursor is buying code review startup Graphite in a deal that brings together two popular tools in AI-powered software development. The companies declined to disclose financial terms of the transaction, but said it involves a mixture of cash and equity. They said Graphite will to continue operating as an independent product, but with deeper integration into Cursor's code editing platform. The deal is expected to close in the coming weeks. Cursor CEO, Michael Truell, told Fortune the acquisition addresses what he sees as an emerging bottleneck in software development. "The way engineering teams review code is increasingly becoming a bottleneck to them moving even faster as AI has been deployed more broadly within engineering teams," he said. "Over the past 2.5 years, Cursor has made it much faster to write production code. However, for most engineering teams, reviewing code looks the same as it did 3 years ago. It's becoming a larger portion of people's time as the time to write code shrinks. Graphite has done lots of work to improve the speed and accuracy of code review." AI code editors like Cursor help programmers while they're writing code -- making suggestions, explaining the function of a particular piece of code, and helping teams move around large projects faster. Graphite, used by companies like Shopify, Snowflake, and Figma, helps teams review changes and decide when code is ready to ship, after its written. "We focused on the writing side of things. Graphite has focused on the review side of things. We think the two together can make something even better," Truell said. Graphite CEO Merrill Lutsky said that the two companies "have an almost identical vision for what the future of software development looks like." "Cursor has defined the new way to write code, and we're defining how you review and merge it. Putting those together lets you build an end-to-end platform," he told Fortune. In the immediate term, both products will remain separate, with Graphite maintaining its independent brand. Throughout 2026, Truell said the companies plan to make it easier for developers' code to connect with the review process, including smarter, more context-aware code review that adapts to how teams actually write code. Lutsky said concerns about AI-generated code quality have been a major focus for Graphite. "We've invested deeply in ensuring that code written with the help of AI is safe and high quality," he said. "Together with Cursor, we're going to double down on that and help teams build secure, efficient, high-quality products." The acquisition comes just one month after Cursor, which is valued at $29.3 billion valuation, announced it had reached $1 billion in annualized revenue. The company has seen a rapid rise since it was founded by a team of four MIT graduates in 2022. The company's AI coding tool, which first launched in 2023, has seen major deployments at companies like Salesforce, which according to Truell said had seen a 30% uplift in engineering productivity from using Cursor. Graphite is not Cursor's first acquisition. The company bought AI coding assistant Supermaven in November 2024 and scooped up talent from enterprise startup Koala in July. Graphite, which Lutsky co-founded nearly five years ago with Tomas Reimers and Greg Foster, raised $52 million in a Series B round in March 2025. The company told TechCrunch revenue grew 20x in 2024 without disclosing absolute figures, and expanded to serving tens of thousands of engineers at more than 500 companies, including customers such as Shopify, Snowflake, Figma, and Perplexity. Lutsky said the deal offers Graphite the opportunity to build a more unified development platform. "We've long dreamed of connecting the surfaces where we create, collaborate on, and validate code changes," he said, adding that the deal dramatically accelerates that timeline. The AI coding market has exploded over the past two years as enterprises rush to adopt AI tools in hopes of productivity gains. The U.S. market for AI code tools was valued at $1.51 billion in 2024 and is expected to reach nearly $9 billion by 2032. Big Tech companies including Microsoft and Google are automating large parts of their coding. According to Microsoft CEO Satya Nadella, as much as 30% of the code within the company's repositories is now written by artificial intelligence while at least 25% of new Google code is generated by AI, according to CEO Sundar Pichai. Companies are betting that AI coding tools can supercharge software engineers productivity, but early studies have been mixed. A July study by nonprofit research organization METR found that experienced developers using AI tools were actually 19% slower when using an AI coding assistant, even though they believed they were faster. Consulting firm Bain & Company also reported in September that real-world savings from AI coding have been "unremarkable." Nevertheless, the deal positions Cursor more aggressively in an increasingly competitive market, with OpenAI, Anthropic, and GitHub Copilot among those vying for dominance in the space. Most of these tools, however, are built on top of the same underlying "foundation" AI models rather than developing their own. Cursor, for example, uses Anthropic's Claude and allows users to choose models from other providers to power code generation. While Graphite is also backed by Anthropic, Lutsky downplayed concerns about competing directly with large model providers. "The larger base-model companies are trying to compete across many different verticals," he said. "Cursor is solely focused on how engineers build with AI, and that focus really sets them apart." Truell also brushed off the threat from major AI labs. "Our approach here is to use a combination of the best technology that partners have to offer and then technology that we develop ourselves," he said. The company has focused on cherry-picking the best available models, supplementing them with proprietary ones, and wrapping everything in what it argues is a superior user interface. As for the next year, Truell said the company currently has no additional deals planned, with Cursor focused on building out product features rather than eyeing an IPO. "Our goals for the company are very ambitious over the course of the next decade," he said. "We think that this is the decade in which coding will be automated, and the way in which professional teams build and deliver software will change across the entire software development life cycle."

Cursor acquires AI code review startup Graphite - SiliconANGLE

Code editor provider Cursor has acquired Graphite, a startup with a tool that helps developers check software updates for bugs before releasing them to production. The companies announced the transaction today. According to Fortune, Cursor plans to finance the transaction with a mix of cash and equity. Graphite previously raised more than $50 million from the Anthropic PBC-backed Anthology fund, Figma Ventures and other prominent backers. The repository that contains an application's production code is known as the main branch. When developers wish to add a new feature, they create a copy of the main branch, modify it and then sync the changes back to the original repository. Companies usually require that each engineer's modifications be reviewed by a different member of the software team before they're saved. Graphite, officially Screenplay Studios Inc., has built an artificial intelligence tool that speeds up the code review workflow. It catches cybersecurity issues and features that don't work as intended. The software also spots more subtle issues, such as a code snippet that performs its intended function but consumes more hardware resources than strictly necessary. Software updates must often meet additional requirements besides being bug-free and performant. New code has to comply with company-specific formatting guidelines and contain documentation that explains how it works. According to Graphite, its software detects updates that fail to meet those requirements. Adding a feature to an application often requires developers to create several new software modules. Usually, those modules are reviewed for bugs one at a time. That means engineers have to wait until a module is approved before they can start working on the next one, which slows down development. Graphite provides a feature called stacked diffs that speeds up the workflow. It enables developers to submit a code snippet for review and immediately start working on the next one instead of waiting until the review is complete. Graphite also avoids merge conflicts, or situations where two different developers attempt to modify the same piece of code. A dashboard shows engineers the outstanding code changes awaiting their review. They can customize the dashboard in various ways, such as by placing updates to an important project in a prominent section of the interface. Keyboard shortcuts speed up navigation. Following the acquisition, Cursor plans to offer Graphite as a standalone product alongside its flagship code editor. The latter tool enables developers to create software and fix bugs using natural language prompts. After closing a $2.3 billion funding round last month, Cursor disclosed that its editor is generating more than $1 billion in annualized revenue. "Graphite's product and brand aren't going anywhere," Graphite co-founder and Chief Executive Officer Merrill Lutsky wrote in a blog post. "We'll continue to be the place where hundreds of thousands of engineers at the world's top software companies review and merge code. The only change is that we now have far greater resources to continue to deliver an incredible product." Those additional resources will enable Graphite to roll out new integrations between its code review tool and Cursor. Additionally, the companies plan to enhance Graphite's AI-powered review automation features.