A minor stake in a technology startup, once dismissed during the FTX bankruptcy proceedings, has now reached a multibillion-dollar valuation. Aerospace giant SpaceX has reportedly reached a deal to acquire AI software startup Cursor at a $60 billion valuation. This development has sent shockwaves through the crypto industry, as the initial investment into Cursor by FTX and its affiliated trading firm Alameda Research has skyrocketed in value—highlighting a dramatic shift in the value of bankruptcy estate assets.
Sale at bankruptcy led to massive losses
Back in April 2022, Alameda Research invested $200,000 in Anysphere, the developer behind Cursor, acquiring a 5% stake when the company was valued at only $4 million. However, after FTX’s collapse at the end of 2022 and the ensuing bankruptcy, court-appointed administrators offloaded the same stake in April 2023 for just $200,000—the original investment amount.
Within just a year, Cursor’s value soared to unprecedented levels, turning this sale into a cautionary tale for FTX creditors who missed out on a potential windfall. According to the SpaceX agreement, the 5% stake in Cursor is now valued at $3 billion. This means FTX’s bankruptcy estate sold an asset for a mere fraction—about 1/15,000th—of its current value.
SpaceX’s AI strategy and high-stakes deal
SpaceX revealed this week that it has secured a right to acquire Cursor by the end of this year at a $60 billion valuation. If the full acquisition is not completed, the agreement includes a $10 billion breakup fee. Led by Elon Musk, the move is viewed as part of SpaceX’s strategic push to challenge AI coding leaders such as OpenAI and Anthropic. Musk, whose AI firm xAI merged with SpaceX last year, has acknowledged lagging behind in this field—a factor motivating the Cursor acquisition.
The reason SpaceX is delaying its immediate acquisition of Cursor is tied to its upcoming planned IPO. The company is reportedly targeting a staggering $2 trillion valuation at market debut, and the $10 billion breakup fee has become a crucial factor in the ongoing negotiation process.
FTX creditors miss out on billions
Following FTX’s collapse, bankruptcy administrators rapidly liquidated assets to facilitate early payouts to creditors. Since then, with the crypto market’s recovery, several disposed assets have experienced explosive appreciation. The investment in Cursor—made by Alameda Research and FTX under Sam Bankman-Fried—stands out as a vivid example. Throughout trials and in written statements, Bankman-Fried consistently argued that the hasty asset fire sales ended up irreparably harming creditors.
Bankman-Fried contends that holding on to FTX’s assets during the crisis, instead of dumping them, could have left creditors whole or perhaps even profiting. From prison, he projected that the bankruptcy estate would have hit a total value of $78 billion if assets had not been prematurely sold.
The rollout of Cursor’s AI software tool in 2023 significantly accelerated the company’s valuation. Analysts have noted Cursor’s growth trajectory as exceptionally rare in the startup world. While FTX bankruptcy administrators are reimbursing creditors in principal plus interest in U.S. dollars, they have not been able to pass on the substantial upside generated by recent asset appreciation.
Meanwhile, Sam Bankman-Fried’s family has launched a public campaign appealing for his exoneration. In March, his parents told CNN that “since FTX creditors are ultimately being repaid, the case deserves a fresh review.” The Cursor stake, both in family statements and Bankman-Fried’s commentary, has become a key example of lost value in the bankruptcy process.
