The companies declined to disclose financial terms of the transaction, but said it involves a mixture of cash and equity. They said Graphite will to continue operating as an independent product, but with deeper integration into Cursor’s code editing platform. The deal is expected to close in the coming weeks.

Cursor CEO, Michael Truell, told Fortune the acquisition addresses what he sees as an emerging bottleneck in software development.

“The way engineering teams review code is increasingly becoming a bottleneck to them moving even faster as AI has been deployed more broadly within engineering teams,” he said. “Over the past 2.5 years, Cursor has made it much faster to write production code. However, for most engineering teams, reviewing code looks the same as it did 3 years ago. It’s becoming a larger portion of people’s time as the time to write code shrinks. Graphite has done lots of work to improve the speed and accuracy of code review.”

AI code editors like Cursor help programmers while they’re writing code—making suggestions, explaining the function of a particular piece of code, and helping teams move around large projects faster. Graphite, used by companies like Shopify, Snowflake, and Figma, helps teams review changes and decide when code is ready to ship, after its written.

“We focused on the writing side of things. Graphite has focused on the review side of things. We think the two together can make something even better,” Truell said.

Graphite CEO Merrill Lutsky said that the two companies “have an almost identical vision for what the future of software development looks like.”

“Cursor has defined the new way to write code, and we’re defining how you review and merge it. Putting those together lets you build an end-to-end platform,” he told Fortune.

In the immediate term, both products will remain separate, with Graphite maintaining its independent brand. Throughout 2026, Truell said the companies plan to make it easier for developers’ code to connect with the review process, including smarter, more context-aware code review that adapts to how teams actually write code.

Lutsky said concerns about AI-generated code quality have been a major focus for Graphite. “We’ve invested deeply in ensuring that code written with the help of AI is safe and high quality,” he said. “Together with Cursor, we’re going to double down on that and help teams build secure, efficient, high-quality products.”

An end-to-end AI coding platform

The acquisition comes just one month after Cursor, which is valued at $29.3 billion valuation, announced it had reached $1 billion in annualized revenue. The company has seen a rapid rise since it was founded by a team of four MIT graduates in 2022. The company’s AI coding tool, which first launched in 2023, has seen major deployments at companies like Salesforce, which according to Truell said had seen a 30% uplift in engineering productivity from using Cursor.

Graphite is not Cursor’s first acquisition. The company bought AI coding assistant Supermaven in November 2024 and scooped up talent from enterprise startup Koala in July.

Graphite, which Lutsky co-founded nearly five years ago with Tomas Reimers and Greg Foster, raised $52 million in a Series B round in March 2025. The company told TechCrunch revenue grew 20x in 2024 without disclosing absolute figures, and expanded to serving tens of thousands of engineers at more than 500 companies, including customers such as Shopify, Snowflake, Figma, and Perplexity.

Lutsky said the deal offers Graphite the opportunity to build a more unified development platform. “We’ve long dreamed of connecting the surfaces where we create, collaborate on, and validate code changes,” he said, adding that the deal dramatically accelerates that timeline.

The AI coding market is booming

The AI coding market has exploded over the past two years as enterprises rush to adopt AI tools in hopes of productivity gains. The U.S. market for AI code tools was valued at $1.51 billion in 2024 and is expected to reach nearly $9 billion by 2032.

Big Tech companies including Microsoft and Google are automating large parts of their coding. According to Microsoft CEO Satya Nadella, as much as 30% of the code within the company’s repositories is now written by artificial intelligence while at least 25% of new Google code is generated by AI, according to CEO Sundar Pichai.

Companies are betting that AI coding tools can supercharge software engineers productivity, but early studies have been mixed. A July study by nonprofit research organization METR found that experienced developers using AI tools were actually 19% slower when using an AI coding assistant, even though they believed they were faster. Consulting firm Bain & Company also reported in September that real-world savings from AI coding have been “unremarkable.”

Nevertheless, the deal positions Cursor more aggressively in an increasingly competitive market, with OpenAI, Anthropic, and GitHub Copilot among those vying for dominance in the space. Most of these tools, however, are built on top of the same underlying “foundation” AI models rather than developing their own. Cursor, for example, uses Anthropic’s Claude and allows users to choose models from other providers to power code generation.

While Graphite is also backed by Anthropic, Lutsky downplayed concerns about competing directly with large model providers. “The larger base-model companies are trying to compete across many different verticals,” he said. “Cursor is solely focused on how engineers build with AI, and that focus really sets them apart.”

Truell also brushed off the threat from major AI labs. “Our approach here is to use a combination of the best technology that partners have to offer and then technology that we develop ourselves,” he said. The company has focused on cherry-picking the best available models, supplementing them with proprietary ones, and wrapping everything in what it argues is a superior user interface.

As for the next year, Truell said the company currently has no additional deals planned, with Cursor focused on building out product features rather than eyeing an IPO.

“Our goals for the company are very ambitious over the course of the next decade,” he said. “We think that this is the decade in which coding will be automated, and the way in which professional teams build and deliver software will change across the entire software development life cycle.”

Bryant pushed her cart out of a Walmart in Rocky Mount, North Carolina, and loaded her sedan’s backseat with bags of gifts. While they would soon bring joy to her friends and family, it was difficult for the 26-year-old to feel good about the purchases.

“Having to pay bills, if you happen to pay rent and try to do Christmas all at the same time, it is very, very hard,” she said with exasperation.

Ahead of President Donald Trump’s Friday evening visit to Rocky Mount, some residents say they are feeling an economic squeeze that seems hard to escape. The uneasy feeling spans political affiliation in the town, which is split between two largely rural and somewhat impoverished counties, although some were more hopeful than others that there are signs of reprieve on the horizon.

This will be Trump’s second event this month aimed at championing his economic policies ahead of a consequential midterm election next year, both held in presidential battleground states. Similar to Trump’s earlier stop in Pennsylvania, Rocky Mount sits in a U.S. House district that has been historically competitive. But earlier this year, the Republican-controlled legislature redrew the boundaries for the eastern North Carolina district to favor their party as part of Trump’s push to have GOP-led states gerrymander their congressional districts to help his party retain its House majority for the last half of his term.

Rocky Mount may be in a politically advantageous location, but the hardships its residents report mirror the tightening financial strains many Americans say they are feeling, with high prices for groceries, housing and utilities among their top concerns. Polls show persistently high prices have put Americans in a grumpy mood about the state of the economy, which a large majority say is performing poorly.

Trump has insisted the economy is trending upward and the country will see some relief in the new year and beyond. In some cases, he has dismissed affordability concerns and encouraged Americans to decrease their consumption.

‘Without the businesses, it’s dead’

Crimson smokestacks tower over parts of downtown Rocky Mount, reminding the town’s roughly 54,000 residents of its roots as a once-booming tobacco market. Through the heart of downtown, graffiti-covered trains still lug along on the railroad tracks that made Rocky Mount a bustling locomotive hotspot in the last century.

Those days seem long gone for some residents who have watched the town change over decades. Rocky Mount has adapted by tapping into other industries such as manufacturing and biopharmaceuticals, but it’s also had to endure its fair share of challenges. Most recently, financial troubles in the city’s government have meant higher utility prices for residents.

The city has been investing to try to revitalize its downtown, but progress has been slow. Long stretches of empty storefronts that once contained restaurants, furniture shops and drug stores line the streets. Most stores were closed Thursday morning, and not much foot traffic roamed the area.

That’s left Lucy Slep, who co-owns The Miner’s Emporium jewelry store with her husband, waiting for Trump’s promised “Golden Age of America.”

The jewelry store has been in downtown Rocky Mount for nearly four decades, just about as long as the 64-year-old said she has lived in the area. But the deterioration of downtown Rocky Mount has spanned at least a decade, and Slep said she’s still hoping it will come back to life.

“Every downtown in every little town is beautiful,” she said. “But without the businesses, it’s dead.”

Slep’s store hasn’t escaped the challenges other Rocky Mount small businesses have endured. Instead of buying, more people have recently been selling their jewelry to the shop, Slep said.

Customers have been scarce. About a week out from Christmas, the store — with handmade molded walls and ceilings resembling cave walls — sat empty aside from the rows of glass cases containing jewelry. It’s been hard, Slep said, but she and her husband are trying to make it through.

“This year is just not a jewelry Christmas, for whatever reason,” she said.

Better times on the horizon — depending on whom you ask

Slep is already looking ahead to next year for better times. She is confident that Trump’s economic policies — including upcoming tax cuts — will make a marked difference in people’s cost of living. In her eyes, the financial strains people are feeling are residual effects from the Biden administration that eventually will fade.

Optimism about what’s to come under Trump’s economy might also depend on whether residents feel their economic conditions have changed drastically in the past year. Shiva Mrain, an engineer in Rocky Mount, said his family’s situation has not “become worse nor better.” He’s been encouraged by seeing lower gas prices.

Bryant, the engine technician, feels a bit more disillusioned.

She didn’t vote in the last election because she didn’t think either party could enact changes that would improve her life. Nearly a year into the Trump administration, Bryant is still waiting to see whether the president will deliver.

“I can’t really say … that change is coming,” she said. “I don’t think anything is going to change.”

Now, you can ask an even more pointed question – perhaps adding in a preference for arch support, a shopping mile radius – to a large language model (LLM) and get a clear, context-rich answer: “Here are three nearby options that fit your criteria. The top-rated one is available for pickup in 40 minutes.”

It’s an improved interaction, but not at the cost of a more complex user experience. This new way of search is redefining consumer behavior and expectations, and how marketers must approach brand visibility. In fact, it represents a reconfiguration of digital marketing and a new economy of visibility.

As these interactions become more complex and context-rich, the way we measure success must evolve too.

Visibility Is the New KPI

In traditional SEO, success means ranking on page one of Google. In the AI era, success means being part of the answer — cited, mentioned, or described accurately when an AI system responds.

This is not a mere marketing nuance: it’s a structural shift in how digital presence is valued. Companies that understand this will treat AI visibility as a new form of brand capital, something to monitor and manage as carefully as reputation or market share.

Advertising economics are already following this pattern: U.S. advertisers are projected to spend over $25 billion annually on AI-powered search placements by 2029, which is nearly 14% of total search budgets.

But, understanding how visibility is measured is just the first step. To capture it effectively, brands must recognize that product discovery itself is being reconstructed, with two distinct search experiences shaping how users find and interact with information.

Two User Experiences, Two Optimization Models

We now have two search experiences — traditional search and AI-driven search — each serving different user needs.

Frankly, this is the simplest framework to offer, when in fact, it is even more complex and nuanced once you take into account AI agents that act autonomously on behalf of the customer.

Traditional search is navigational, guiding users through lists of pages. Effectively, it points them in the right direction.

Meanwhile, AI-driven search is conversational, contextual, and consultative. It’s able to perform multi-step research, interpret context, and merge data from multiple sources into one synthesized response. For marketers, that means building for two visibility models: in SEO, we optimize for keywords; in AI discovery, we optimize for prompts.

The shift in user behavior is measurable and gaining ground. According to Semrush AI Visibility Index, between August and October 2025:

To stay visible, brands must start by identifying which questions matter most to their business – prioritizing prompts that are both high-volume and high-impact. Irrelevant traffic is wasted effort; rare relevance won’t scale. The sweet spot has always been where volume meets relevance, and AI discovery only raises the stakes—rewarding context, authority, and precision the same way great SEO always has.

As AI-driven and traditional search continue to evolve, the line between them is beginning to blur. Brands that optimize for both experiences today will be best positioned to thrive as these models converge into a single, unified discovery interface.

Preparing for the AI + Traditional Search Convergence

Eventually, you’ll see conversational answers alongside maps, reviews, and transactional links — a mix of synthesis and structure. When that happens, businesses will track two main metrics:

• Traffic, the traditional measure of visits
• AI Visibility, a new measure of how often and how accurately a brand appears in AI-generated responses

But visibility alone won’t be enough. The next wave of competition will happen at the content layer.

Brands will need to build for both bots and humans — crafting content that reads naturally, ranks intelligently, and feeds the context these models rely on. It’s a new kind of content development, where clarity for users and machine readability carry equal weight.

When that becomes common, websites will need to work as seamlessly for bots as they do for people. Features like SMS-based authentication or manual verification could block machine-driven transactions entirely. Businesses will need to rethink checkout and navigation to accommodate non-human operators.

While optimizing for visibility and content readiness is essential, the larger shift is economic: the convergence of AI and search is redefining how value is created, measured, and captured across the digital landscape.

AI Discovery and the New Economics of Search

The economics of search are changing.

This convergence of SEO and AI visibility is not a short-term marketing trend. It’s a deeper transformation — the creation of a discovery layer that connects information accuracy, credibility, and commercial outcomes in a continuous loop.

Within five years, we’ll unlikely distinguish between “search engines” and “AI assistants.” Instead, we’ll talk about several intelligent systems from companies such as Google and OpenAI that decide what people see, trust, and buy.

While the system itself is changing, the opportunity remains open. AI Search doesn’t belong only to the biggest players — it’s a reset. Smaller brands can rise faster by being precise, credible, and contextually relevant, while larger enterprises must relearn agility and authority at scale.

In traditional SEO, the strongest often dominated; in AI discovery, the most relevant wins.

Businesses that measure and manage their visibility within this new system will define the next era of digital competition.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.