Anysphere, the company behind the AI coding assistant Cursor, has announced its acquisition of Graphite, a startup that uses artificial intelligence to review and debug code. While the financial terms were not officially disclosed, Axios reported that Cursor paid significantly more than Graphite’s last valuation of $290 million. That valuation was set earlier this year when the five-year-old startup raised a $52 million Series B round.
This strategic merger addresses a critical challenge in modern software development. The code generated by AI assistants is often prone to bugs, which forces engineers to spend considerable time making corrections. Although Cursor already offers an AI-powered code review feature called Bugbot, Graphite brings a distinct and specialized capability to the table. Its toolset enables “stacked pull requests,” a method that allows developers to work on multiple dependent changes simultaneously without waiting for individual approvals.
The combination of AI-powered code writing from Cursor and advanced AI-powered review from Graphite is designed to significantly accelerate the entire process, from drafting code to shipping the final product. This integrated approach aims to streamline developer workflows and improve efficiency.
The market for AI code review tools is growing. Other notable players include CodeRabbit, which was valued at $550 million in September, and a smaller competitor named Greptile, which announced a $25 million Series A funding round this fall.
The connection between the two companies runs deep. Michael Truell, co-founder and CEO of Anysphere, first met Graphite’s co-founders—Merrill Lutsky, Greg Foster, and Thomas Reimers—before launching Cursor. They were all part of the Neo Scholar program, a prestigious initiative for college students run by Ali Partovi’s early-stage venture firm, Neo. Neo was an early backer of Graphite at the seed stage. Furthermore, Cursor and Graphite share several major investors, including Accel and Andreessen Horowitz.
This acquisition is part of a broader expansion strategy for Anysphere. The company, which was last valued at $29 billion in November, has been actively acquiring other firms. Last month, it purchased Growth by Design, a tech recruiting strategy company. In July, Anysphere acquired the talent from AI-powered CRM startup Koala for a post-money valuation of $129 million.