This is similar to the sort of hype which happened with Clubhouse app ($4B valuation, then the users stopped signing up.), Hopin ($9BN until the pandemic ended) and finally Inflection AI ($4B and almost no-one uses it after the initial AI hype).

One of biggest risks is Microsoft who can further lower prices with Copilot (and they can afford to do that for years) for longer and rapidly copy Cursor just like they destroyed Slack with Teams.

There really is no lock-in case for Cursor (unless they acquire something else) as users can easily cancel and switch back to VS Code and Cursor can lose that ARR very quickly and the cost is the entire company.

For Microsoft? Costs them nothing.

This $9B valuation is peak euphoria and this is the best time for Cursor to sell as they are getting very greedy after rejecting a buyout from OpenAI (twice).