Two-Week Turnaround: Anthropic Reclaims Core Programming Talent from Cursor}
In a rapid two-week reversal, Anthropic has re-hired Boris Cherny and Cat Wu, key figures in Claude Code, after they were poached by Cursor’s developer Anysphere, highlighting intense industry competition.
Earlier this month, according to The Information, Boris Cherny and Cat Wu, leaders of Anthropic’s Claude Code project, were poached by Anysphere, the developer of AI programming application Cursor. Read more in this article.
Boris Cherny, the lead developer of Claude Code, is considered the soul of the project. He previously joined Anysphere as Chief Architect and Engineering Director. Cat Wu, the product manager, now serves as Product Director at Anysphere.
Boris Cherny and Cat Wu, in an interview, Cherny stated that 80% of Claude Code’s code was written by Claude itself. Image source: Latent Space
Unexpectedly, just two weeks later, the situation reversed!
According to exclusive reports from The Information, Anthropic re-hired the two key leaders of Claude Code.
Recently, Anthropic shared some insights with investors: despite still spending heavily, the company’s profitability is improving.
This statement had an immediate effect. Insiders reveal that some investors are now willing to invest at a valuation exceeding $100 billion in the next funding round. Just four months ago, the company’s valuation was only $58 billion.
CEO Dario Amodei of Anthropic
Mixed Profitability Outlook
Anthropic reports a gross margin of 60% when selling AI models and chatbots like Claude directly to clients, aiming to reach 70%. This is a strong figure, indicating over 60 yuan profit per 100 yuan revenue after server and support costs.
However, there’s a catch. This margin does not include sales via Amazon AWS and Google Cloud, where the gross margin is actually negative 30% due to high intermediary fees.
While most revenue currently comes from direct sales, Anthropic expects cloud providers to become the main sales channels in the future, which could impact overall profitability.
In comparison, OpenAI predicted a gross margin of 48% for 2025, aiming to reach 70% by 2029. It’s unclear if both companies calculate margins similarly.
Both Anthropic and OpenAI are heavyweight players in AI funding:
- Anthropic: Spent $5.6 billion last year, plans to spend $3 billion this year.
- OpenAI: Revenue is several times higher, but spending is slower.
Despite high costs, both companies’ revenue growth is explosive, likely surpassing initial optimistic forecasts. Investors seem to prioritize growth over costs for now.
If valuations reach $100 billion, investors are willing to pay at least 25 times the projected future revenue.
In January, OpenAI’s valuation was discussed at around $260 billion, about 43 times its projected revenue at the time. Its annual revenue has since grown from $6 billion to over $10 billion.
Claude Code as the “New Ace” in Programming
Anthropic’s growth is largely driven by its strong programming capabilities. Their programming assistant, Claude Code, is rapidly gaining market share.
- Impressive growth: Downloads increased sixfold since June, reaching 3 million weekly downloads.
- Revenue contribution: Generates over $200 million annually.
Meanwhile, competitors’ situations seem less optimistic.
Cursor, a third-party tool, does not provide direct access or fine-tuning of model parameters. It simply interfaces with models provided by OpenAI, Anthropic, Google, etc.
Recent updates to Cursor have caused dissatisfaction among users.
The update shifted the payment model from a fixed subscription to a pay-as-you-go system.
- Before: Pro users had 500 fast-response uses per month, with unlimited slower responses afterward.
- Now: Users get a $20 monthly quota, covering any model calls within that limit. Extra usage requires purchasing credits.
Cursor used to bear the high costs of AI models itself, but now it passes those costs to users, leading to decreased response quality and user migration to other platforms.
Meanwhile, the Windsurf acquisition has been controversial, with reports of a $2.4 billion deal involving internal conflicts. More details are available in this article and this report.
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