The demand for AI-powered coding assistants is experiencing rapid growth, with investor interest surging.

According to a report by Bloomberg, Anysphere, the company behind the AI-powered coding assistant Cursor, is engaged in discussions with venture capitalists to secure funding at a valuation of nearly $10 billion.

If successful, this funding round would occur approximately three months after Anysphere’s previous fundraising effort, in which it raised $100 million at a pre-money valuation of $2.5 billion, as initially reported by TechCrunch. The new round is expected to be led by Thrive Capital, a returning investor.

Thrive Capital and Anysphere have not responded to requests for comment at this time.

As noted by the New York Times, Anysphere’s previous valuation was equivalent to 25 times its annual recurring revenue (ARR) of $100 million. However, investors now appear willing to assign even higher valuations to rapidly growing companies. With Anysphere’s current ARR potentially reaching $150 million, according to The Information, the proposed deal would value the company at a significant 66 times ARR.

Anysphere is not the only company to receive such a substantial valuation from investors.

As reported by TechCrunch, Codeium, the company behind the AI coding editor Windsurf, is currently raising capital at a valuation of nearly $3 billion. Kleiner Perkins, which is leading the investment round, has valued Codeium at approximately 70 times its ARR of $40 million.

Investors note that AI is being adopted most rapidly in the development of coding tools, outpacing its implementation in sectors such as sales, law, healthcare, and others.

In recent weeks, investors have been approaching Poolside, another company developing AI-powered coding tools and its own large language model (LLM), according to sources cited by TechCrunch and The Information. Poolside has not responded to requests for comment at this time.