Cursor! Foiled again!

Top News

• Cursor drops AI design tool: Anysphere’s beloved coding tool (should they just rename the company Cursor at this point?)… Anyway, Anysphere’s beloved coding tool released what Wired terms a “vibe-coding product for designers” called Visual Editor. It provides the same suite of manual features that you’d expect from a professional design tool, but also allows the user to request changes and edits in the natural language style of an AI chatbot. Clearly, with Cursor capturing a big chunk of the AI coding market — they’ve already surpassed $1B in ARR — they’re ready to expand the vision.

• Twitter’s back! Kinda. Not really. A new startup out of Virginia calling itself “Operation Bluebird” aims to revive classic Twitter, and has even laid out plans for a new URL: Twitter.new. You may have detected one small snag in this plan: they do not own the Twitter brand, including that iconic blue bird logo they’re referencing, which remain the property of X Corporation and its owner, Elon Musk. That explains why the company has formally petitioned the US Patent and Trademark Office to cancel X’s trademarks on both “Twitter” and “tweet.” (In their favor, Musk did tweet in 2023 that he was “bid[ding] adieu to the twitter brand…” which does sound like a clear-cut case of trademark abandonment.) Does this petition actually have a chance at success? Does Musk even want to hang out to the name Twitter, which he did very purposefully and publicly dismiss? We’ll see.

• Worktrace wants to power up enterprise AI: We’ve all heard about that MIT study concluding that enterprises weren’t getting a lot out of their AI pilots. There has certainly been some additional research that reached contrary conclusions, but even if you accept the overall premise that enterprise AI has been a let-down to date, the question remains: is that locked in? A limitation of LLMs themselves? Or is this just another problem to be solved by clever founders? A new startup from OpenAI vet Angela Jiang and researcher/academic Deepak Vasisht argues that it’s the latter. Workspace AI aims to study an enterprise’s internal workflows, then design a customized plan to help them automate tasks with AI. They’re currently working with five “design partners” to fine-tune the process and develop their offering. The company just announced $9.3 million in seed funding, led by Conviction and 8VC.

TWiST 500

We try to write about a diversity of cool startups in this space, but sometimes… the pull of OpenAI news is just too mighty. Nothing to be done.

The company dropped GPT-5.2 on the world this week, mere days after the internet kind of snickered at CEO Sam Altman’s “Code Red” declaration. The company’s chief of applications, Fidji Simo, acknowledged the Code Red discussion in a chat witih reporters on Thursday, but denied that GPT-5.2 had been moved up due to the announcement. This release has been in the works for months, we’re told.

And with good cause! After a chorus of disappointed reactions to GPT-5, the company released 5.1 with little fanfare. As rivals like Gemini 3 and Anthropic’s Claude racing up the top of the benchmark rankings — and Altman coming off increasingly defensive when discussing the company’s massive investments in chips and infrastructure — public sentiment has shifted against the most visible of all AI companies. A white-hot new model is just what OpenAI needs to start reversing this narrative.

For most companies, that would be big enough news for at least a week, but OpenAI ALSO announced on the SAME DAY a landmark deal with Disney. The media and entertainment giant will make a $1 billion equity investment in the TWiST 500 favorite. In exchange, ChatGPT and OpenAI’s Sora app both get access to Disney’s enormous stable of copyrighted characters. Finally, you can co-star in videos with Darth Vader AND Ariel!

The options exclusively include animated characters, characters in masks, or other representations that don’t include the faces of real performers. The app also won’t be able to simulate any human actors’ voices. This was an important enough distinction for Disney CEO Bob Iger to stress it on CNBC Thursday, following the deal’s announcement.

“We are not including name and likeness, nor are we including character voices. So in reality, this does not in any way represent a threat to the creators at all.” Whether or not those creators agree (or indeed, the artists who created the animated characters) will assuredly be the subject of much discussion over the coming weeks and months. – Lon

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This Week in Startups

E2222: It’s a VC Roundtable, featuring special guests Bryan Kim of a16z and David Clark of Ven Cap. On the docket: Boom Supersonic’s innovative new turbine-based revenue stream, Bill Gurley’s iconic “Miss By a Mile” post about calculating TAM, why it’s so important for founders for remain relentless, the discourse surrounding the “AI Bubble,” and much more.

E2221: It’s a tasty TWiST parfait, with three different founder-focused layers. First, Lon and Alex look back at a 2016 chat between Jason and Zapier mastermind Wade Foster, about running an entirely remote team, raising seed money back in ‘12, and why MS Office was, at the time, their Holy Grail of integrations. PLUS Alex chats with Alembic’s Tomas Puig about the next generation of marketing analytics AND a brand new entry in our Gamma Pitch Deck competition.

E2220: Ads are probably coming to ChatGPT, but not JUST yet. Though a screenshot that appeared to show a Target ad in ChatGPT results spread like wildfire around social media, in fact, that was just one of those “brand integrations” allowing you to shop for Target merch within the popular chatbot. On TWiST, Jason and Alex dig deeper into the inevitable arrival of chatbot ads, and wonder aloud if anyone at OpenAI is really thinking deeply about how this will work, and how to confront backlash from a public that prefers their outputs ad-free.

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