This feels like another Twitter moment... unless he's absolutely desperate for engineers who can train LLMs. In that case it's basically an acquihire. Otherwise, this makes absolutely zero sense.

did cursor do model training? I thought it used models built by other companies

Yes, https://cursor.com/docs/models/cursor-composer-2

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It's fine tuned Kimi, they didn't train it from scratch.

Sure, but so what? It seems that model size and RL are the determining factors these days.