This analysis was first published in SvD Näringsliv, in Swedish, on April 27th, 2026. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.
The Swedish tech industry sees the multi-billion sale of Cursor as an enormous success. Beyond one individual Swede’s personal finances, it should reasonably be exactly the opposite.
It did not take many minutes before Stockholm was jubilant over the coding tool Cursor’s proposed sale to SpaceX. Yet another victory for the Swedish ecosystem of tech companies? It is rather a masterclass in confirmation bias. People see what they want to see — and not much else.
What has happened is this: an American company is buying another American company, whose one co-founder is Swedish — but he doesn’t even work there anymore. The reason for the sale is, however, interesting to look at more closely — and it is not as rosy as it first appears.
Let us begin by describing Cursor. It is not every day a company that most people have barely heard of is proposed to be sold for 550 billion kronor. The company is actually called Anysphere, and its product — Cursor — helps developers write code using AI. To do this, they use a range of different AI models from companies such as OpenAI, Anthropic, and Google. Relatively recently they also launched their own model, Composer, as a way to reduce their dependence on the giants.
It is precisely that dependence — and its costs — that has put Cursor in a tricky situation.
This week The Information revealed that Cursor has, until now, had negative gross margins. For those not entirely comfortable with financial terminology, this can be explained more simply. When a company takes its revenues and deducts the cost of being able to deliver the service — that gives you the gross margin. In Cursor’s case, they lose money even there. After that, a host of other costs are added — marketing and product development, for example. This means that for every krona Cursor sells for, they lose more than a krona. That model is, for understandable reasons, tricky to sustain for too long.
For companies that are growing rapidly, however, this is not entirely unusual. In theory, the problem should resolve itself as sales increase and the company grows. Many startups have gone under while waiting for this breakeven point. And even if you are on the way to that point, it costs a great deal of money before you get there. This also applies to AI giants such as Anthropic and OpenAI, which are nowhere near profitability.
Cursor was thus out on the market trying to raise several new billion dollars in financing. They received some offers, but also encountered a degree of scepticism — despite the company’s popular product.
Then the fundraising became a sale instead.
The investors’ concern stemmed from Cursor’s supplier, and now competitor, Anthropic and its product Claude. When you use Cursor, it is often Claude doing the heavy lifting in the background. Cursor is an intermediary layer between the end user and the AI services beneath, much like Swedish Lovable, for example.
The prospective investors worried about the possibility that customers could bypass Cursor and just use Claude instead. Which many already do today. If Claude were also to decide not to allow Cursor to use their service, problems could quickly arise.
It was at this point that Elon Musk’s SpaceX stepped in.
They recently merged with Musk’s other company — xAI — which had in turn merged with the social network X (which Musk also owned). SpaceX will buy Cursor for 550 billion kronor, or pay around 92 billion kronor in a fee to Cursor if the deal is not completed for some reason. With the rocket company’s imminent stock market listing — and its reportedly galactic valuation of around 16,000 billion kronor — the price tag is relatively manageable.
For the venture capitalists who invested in Cursor, the deal provides a good return. Selling portfolio companies at high prices is the entire business model. The Swedish co-founder Arvid Lunnemark from Malmö will almost certainly become a billionaire in the process. Like Joel Hellermark, who sold Sana to Workday for 10 billion kronor, the timing is elegant. Interest in AI, and the valuations that follow, has never been higher.
Looking at the value for the Swedish tech ecosystem, it is not obvious that one should celebrate the deal. Cursor was sold because the alternatives to continuing were becoming very limited. The company has never made a single krona in profit, and they burned billions of dollars before reaching this point.
They managed to get out of their precarious financial situation before it was too late. But once again, a large American company is gobbling up a smaller one. One of the few conceivable challengers to the existing oligopoly of AI companies disappears. And one with a Swedish connection at that.
After the Cursor deal, a Sweden-born founder living in San Francisco will become extraordinarily wealthy. Hats off for that. But if anyone thinks this is something to celebrate in Stockholm, they have probably missed the point.
