The demand for AI coding assistants from investors is rapidly growing.

Anysphere, the creators of the AI-driven coding assistant Cursor, are reportedly in negotiation with venture capitalists to secure funding at an estimated valuation of around $10 billion, as per Bloomberg.

Should this round of funding take place, it would occur almost three months post Anysphere’s last funding round where they raised $100 million at a $2.5 billion pre-money valuation, originally reported by TechCrunch. The anticipated funding round is predicted to be spearheaded by repeat investor, Thrive Capital.

Attempts to get a comment from Thrive Capital and Anysphere were unsuccessful at the time of writing.

In Anysphere’s previous funding round, the company was valued at 25 times its $100 million Annual Recurring Revenue (ARR), as per The New York Times. However, investors appear willing to place even higher valuations on rapidly growing companies today. Reports from The Information suggest that Anysphere’s current ARR may have risen to $150 million. If true, the upcoming deal could value the company at an astounding 66 times ARR.

Anysphere isn’t the sole company witnessing such a high valuation from investors.

Codeium, the firm behind AI coding editor Windsurf, is also raising funds at an estimated valuation of nearly $3 billion, reported by TechCrunch last month. Kleiner Perkins, leading the funding round into Codeium, valued the firm at approximately 70 times ARR of around $40 million.

Investors agree that AI is being adopted at a much faster rate in coding tools, surpassing its use in other sectors such as sales, law, and healthcare.

In recent times, Poolside, another company using AI to power coding, has been approached by investors, according to TechCrunch and The Information. Poolside, who are also developing their own LLM, did not provide a comment when contacted.