Hi! 👋 Welcome to The Big Y!
With news of Anthropic crossing the $4B ARR mark, the codependent relationship between Anthropic and Anysphere (developer of Cursor) is more interesting than ever. Cursor is an AI-native code editor that can be powered by a user's choice of the top coding LLMs on the market, including Anthropic’s Claude models. Anthropic obviously has its Claude series of models, but it is also expanding into the application layer with a clear competitor to Cursor, Claude Code.
Down to the complicated part: Not only is Anysphere a direct competitor at the application and tool layer to Anthropic but Anysphere is reportedly also Anthropic’s largest customer. Anthropic has the best coding model on the market, which Cursor needs to have access to in order to have a great product for its user base, and besides revenue Anthropic benefits from getting data on what developers use their models for through Cursor.
Recently, Anysphere poached the lead developer and product manager of Claude Code over to their team, which complicates the relationship between the two companies as both try to have the better coding tool. Anthropic likely won’t cut off access to Claude models (like they did when the Windsurf <> OpenAI (now failed) deal was announced) because Cursor represents such a large slice of their income. Cursor has the luxury of being able to serve a variety of models, so they have the advantage when a better coding model from another vendor hits the market.
It is interesting to see the various dynamics in the GenAI ecosystem play out, with both mutual financial dependency and direct competitive products. Companies and models can fall out of favor so quickly but while things are going well, they are raking in profit.
The Tidbit: Anthropic might be crossing $4B ARR but Nvidia hit the $4 trillion dollar market cap mark last week. A lot of financial winners have emerged from the GenAI boom but nobody can hold a candle to Nvidia’s massive success and dominance in the space.
Know someone who might enjoy this newsletter? Share it with them and help spread the word!
Thanks for reading! Have a great week! 😁