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 of the deal were not disclosed, Axios reported that Cursor paid significantly more than Graphite’s last valuation of 290 million dollars. That valuation was set earlier this year when the five-year-old company raised a 52 million dollar Series B round.
This strategic merger addresses a key 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 specialized toolset to the table. Its standout capability is a “stacked pull request” system, which allows developers to work on multiple dependent changes simultaneously without waiting for individual approvals. Integrating AI-powered code writing with advanced AI review tools like these significantly speeds up the entire process from drafting code to shipping it.
Cursor is not alone in seeing the value of this space. Other startups providing AI-powered code review include CodeRabbit, which was valued at 550 million dollars in September, and a smaller competitor named Greptile, which announced a 25 million dollar Series A round this fall.
The connection between the two companies runs deep. Michael Truell, the co-founder and CEO of Cursor, first met Graphite’s co-founders—Merrill Lutsky, Greg Foster, and Tomas Reimers—before launching his company. 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 investors, including Accel and Andreessen Horowitz.
This acquisition is part of a larger expansion strategy for Cursor. The company, which was last valued at 29 billion dollars in November, has been actively acquiring other firms. Last month, it purchased Growth by Design, a tech recruiting strategy company. In July, Cursor acquired the talent from AI-powered CRM startup Koala for a post-money valuation of 129 million dollars.