AI startup Anysphere is raising a new funding round, with a valuation of at least $400 million, backed by A16z.

What Happened: Anysphere, the creator of an AI code editor named Cursor, is in the process of raising funds. The valuation of this round is a significant jump from the previous one, Business Insider reported on Tuesday.

Founded in 2022, Anysphere's last funding round in July 2023 was led by the OpenAI Startup Fund, with contributions from Sequoia Capital, BoxGroup, ex-GitHub CEO Nat Friedman, and Dropbox co-founder Arash Ferdowsi. The company's total funding to date is $11 million, but the exact amount raised in the 2024 round remains undisclosed.

Anysphere's first product, Cursor, is an AI-powered integrated development environment designed to enhance engineers' productivity. It autocompletes code, writes code from plain English, and provides answers about the codebase. The product generates revenue through a freemium model, with engineers from companies like Midjourney, Perplexity, Shopify, and OpenAI among its users.

Why It Matters: OpenAI-backed startups have been making significant strides in the AI sector. For instance, Rain AI, another startup backed by OpenAI co-founder Sam Altman, recently appointed a former Apple Inc. (NASDAQ:AAPL) chip executive to lead its hardware engineering division. This move is expected to accelerate the development of innovative semiconductors for artificial intelligence.

Moreover, Dust, a French AI startup co-founded by former OpenAI researcher Stanislas Polu, secured a $16 million investment led by Sequoia Capital. Dust specializes in creating customized AI bots for businesses and plans to expand its operations into the U.S. market.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari