It's a bit more than that. They have plenty of data to inform any finetunes they make. I don't know how much of a moat it will turn out to be in practice, but it's something. There's a reason every big provider made their own coding harness.
Can anyone enlighten me how having a coding harness when for most customers you say "we won't train on your code" helps you do RL? What's the data that they rely on? Is it the prompts and their responses?
Looks like two Moonshot employees confirmed that it's not licensed before Moonshot made the decision to get out of the debate and delete their posts [0][1].
"Yes, Kimi K2.5 is an open source AI model. Developers and researchers can explore its architecture, build new solutions, and experiment openly. Model weights and code are publicly available on Hugging Face and the official GitHub repository."
Our only modification part is that, if the Software (or any derivative works
thereof) is used for any of your commercial products or services that have
more than 100 million monthly active users, or more than 20 million US dollars
(or equivalent in other currencies) in monthly revenue, you shall prominently
display "Kimi K2.5" on the user interface of such product or service.
Cursor is mostly an IDE / coding-agent harness company.
So it probably makes sense for them not to train their own base model, but instead license something like Kimi and fine-tune it for their own harness and workflows.
Their moat looks pretty thin. A VSCode fork with an open-source LLM fork on top. In the fast-moving coding-agent market, it’s not obvious they keep their massive valuation forever.
There is a plausible scenario in which software engineering requires a very finite amount of intelligence, in which sota models will be used mainly for other things and where for coding the harness will become increasingly more important than the model.
Their value is in the data they've collected and are collecting. Usage, acceptance rate, and all the connected signals. Plus having a large userbase where they can A / B test any finetune they create.
There are many reasons to make fun of Cursor. However, one of the things get right is their autocomplete model.
Are there any open models that come close? Why doesnt OAI or Anthropic dedicate some resources to blowing Cursor's model out of the water? Cursor's completion model is a sticking point for a lot of users.
Most companies don't do auto competition these days, including some that just recently stopped offering completion.
Which I find very unfortunate. There are so many cases, especially in proprietary codebases with non standard infrastructure, where good autocomplete is much better than "agentic" edits that produce nothing but slop which takes longer to clean up.
There is no ToS at play here. There's only the license[1], which is MIT modified like so:
> Our only modification part is that, if the Software (or any derivative works
thereof) is used for any of your commercial products or services that have
more than 100 million monthly active users, or more than 20 million US dollars
(or equivalent in other currencies) in monthly revenue, you shall prominently
display "Kimi K2.5" on the user interface of such product or service.
Yes, this is pretty clear-cut. There's even a great alternative, namely GLM-5, that does not have such a clause (and other alternatives besides) so it feels a bit problematic that they would use Kimi 2.5 and then disregard that advertisement clause.
I've replied down the thread, but there are ways to go around that clause entirely, even if it would be enforceable. The obvious way is to have another company do the modification.
The worthwhile question AIUI is whether AI weights are even protected by human copyright. Note that firms whose "core" value is their proprietary AI weights don't even need this (at least AIUI) since they always can fall back on "they are clearly protected against misappropriation, like a trade secret". It becomes more interesting wrt. openly available AI models.
At the same time, Moonshot violated Anthropic's ToS by training on their models' outputs :) [0]. And Anthropic violated copyright law by training on copyrighted material. It's violations all the way down.
They probably licensed it. Still a bit deceptive not to mention it on the model card/blog post, but companies whitelabel all the time without mentioning.
It goes against the ML community ethos to obscure it, but is common branding practice.
Basically this is true for most startups in the world BUT Cursor, so here you are kinda inverting the logic of the matter. Cursor is at a size that, if they wanted to use K2.5, they could clearly state that it was K2.5 or get a license to avoid saying it.
IF we assume that the modified MIT clause is enforceable. And if we assume Cursor Inc. is running the modification. It could very well be the case that Cursor Research LTD is doing the modifications and re-licensing it to Cursor Inc. That would make any clause in the modified MIT moot.
As a paying customer, it just doesn't feel good that they are trying to pass off someone else's model as their own.
I mean I guess this is what businesses do all the time. There's a term for it even, it's called white-labeling.
But is this all that Cursor have? They pass of VS Code as their own, they pass off Kimi as their own... What do Cursor even do? What do I need them for?
White-labeling may be slightly dishonest to the consumer but the manufacturer and distributor are honest with each other. That doesn't appear to be the case here (Kimi's license requires publicly acknowledging Kimi is used for anyone operating at Cursor's scale).
From a users perspective, do we really care what model we're using under the hood? Or how well the software is solving our problems?
Seems like cursor is trying to build a "thicker wrapper" beyond the harness. Either to protect against Anthropic shutting them off or increase margins.
For all the muh productivity guys that like to claim they can turn invisible when no one is looking, an produce 600k lock over 6 weeks, well...cursor is useless now. We know kimi K2.5 won't make you 100 trillion times faster.
Honestly I don't think this leak is any good for Cursor. Not only this appears as a violation to Moonshot's ToS, this may also be in fact enough evidence for Anthropic to ban Cursor from using their models, just like they are doing to OpenCode.
Why? As I said before, Anthropic mentions Moonshot AI (Maker of the Kimi models) as one of the AI labs that were part of this alleged "distillation attack" [0] campaign and will use that reason to cut off Cursor, Just like they did to OpenAI, xAI and OpenCode.
Let's see if the market thinks Composor 2 is really that good without the Claude models helping Cursor. (If Anthropic cuts them off).
Ollama is also doing this.
There is so much money to be made repackaging open source these days.
So funny to see Twitter go wild saying "a 50 person team just beat Anthropic" blah blah.
It's a bit more than that. They have plenty of data to inform any finetunes they make. I don't know how much of a moat it will turn out to be in practice, but it's something. There's a reason every big provider made their own coding harness.
[0] https://chainthink.cn/zh-CN/news/113784276696010804 - may have originally been https://x.com/apples_jimmy/status/2034920082602864990
[1] https://pbs.twimg.com/media/HD2Ky9jW4AAAe0Y?format=jpg&name=...
I had the question "how do you even enforce this weird license term" back then, I guess I know the answer now.
"Is Kimi K2.5 open source?"
"Yes, Kimi K2.5 is an open source AI model. Developers and researchers can explore its architecture, build new solutions, and experiment openly. Model weights and code are publicly available on Hugging Face and the official GitHub repository."
https://www.kimi.com/ai-models/kimi-k2-5
Our only modification part is that, if the Software (or any derivative works thereof) is used for any of your commercial products or services that have more than 100 million monthly active users, or more than 20 million US dollars (or equivalent in other currencies) in monthly revenue, you shall prominently display "Kimi K2.5" on the user interface of such product or service.
But at least the rumor mill has them significantly above that line:
> Revenue: As of March 2026, reports suggest Cursor has surpassed $2 billion in annualized revenue (ARR).
Their moat looks pretty thin. A VSCode fork with an open-source LLM fork on top. In the fast-moving coding-agent market, it’s not obvious they keep their massive valuation forever.
Their value is in the data they've collected and are collecting. Usage, acceptance rate, and all the connected signals. Plus having a large userbase where they can A / B test any finetune they create.
Obviously we're running both, using the right tool for the job.
There is stickiness there from being early. That will be hard to replicate.
People home about Teams sucking, but its market share is several times that of Slack because of distribution.
I guarantee that Microsoft has even more data.
Are there any open models that come close? Why doesnt OAI or Anthropic dedicate some resources to blowing Cursor's model out of the water? Cursor's completion model is a sticking point for a lot of users.
Which I find very unfortunate. There are so many cases, especially in proprietary codebases with non standard infrastructure, where good autocomplete is much better than "agentic" edits that produce nothing but slop which takes longer to clean up.
> Our only modification part is that, if the Software (or any derivative works thereof) is used for any of your commercial products or services that have more than 100 million monthly active users, or more than 20 million US dollars (or equivalent in other currencies) in monthly revenue, you shall prominently display "Kimi K2.5" on the user interface of such product or service.
[1] - https://huggingface.co/moonshotai/Kimi-K2.5/blob/main/LICENS...
https://news.ycombinator.com/item?id=47126614
It goes against the ML community ethos to obscure it, but is common branding practice.
[0] https://chainthink.cn/zh-CN/news/113784276696010804
[1] https://pbs.twimg.com/media/HD2Ky9jW4AAAe0Y?format=jpg&name=...
Currently I’ve not hit any of the limits despite using it quite rigorously, I wonder if this will change with a renewal?
I mean I guess this is what businesses do all the time. There's a term for it even, it's called white-labeling.
But is this all that Cursor have? They pass of VS Code as their own, they pass off Kimi as their own... What do Cursor even do? What do I need them for?
But can I rely on Cursor to be able to keep delivering, when they aren't the one's doing the work themselves?
Seems like cursor is trying to build a "thicker wrapper" beyond the harness. Either to protect against Anthropic shutting them off or increase margins.
They should have disclosed it though. If they didn't it's a bad look for sure.
Cursor is killed for this market.
Why? As I said before, Anthropic mentions Moonshot AI (Maker of the Kimi models) as one of the AI labs that were part of this alleged "distillation attack" [0] campaign and will use that reason to cut off Cursor, Just like they did to OpenAI, xAI and OpenCode.
Let's see if the market thinks Composor 2 is really that good without the Claude models helping Cursor. (If Anthropic cuts them off).
[0] https://www.anthropic.com/news/detecting-and-preventing-dist...