The AI Code Editor Wars: As Cursor IDE Skyrockets in Popularity, VS Code Responds with Open Source AI Strategy

Cursor IDE has emerged as the fastest-growing development environment in recent memory, reaching an unprecedented $100M annual recurring revenue in just 12 months, while Visual Studio Code has announced plans to become a fully open source AI editor. This dramatic shift in the code editor landscape represents one of the most significant developments for software engineers since the introduction of GitHub Copilot, as two major players take different approaches to AI-powered development.

Cursor's Meteoric Rise

In less than three years, Cursor has transformed from an ambitious startup to what many are calling the fastest-growing SaaS product in history. Founded in 2022 by four MIT graduates, Cursor took the bold step of forking Visual Studio Code to create something entirely new: an AI-native development environment that fundamentally reimagines how developers interact with their tools.

A Revolutionary Approach to Code Development

What makes Cursor