What the Windsurf sale means for the AI coding ecosystem
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What the Windsurf sale means for the AI coding ecosystem
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Re: What the Windsurf sale means for the AI coding ecosystem
#2 openai's $3b acquisition of windsurf falls apart. after months of negotiations, they walk away.
google announces they're paying $2.4b to hire windsurf's ceo and 41 researchers for deepmind. not to acquire windsurf. just the humans. the same day openai walks. what a coincidence!
My question is what happened to the $2.4B? Apparently very little of it made its way to the Windsurf employees, as #2 tweeted last week. It wasn't an acquisition although Cognition was. Cognition bought a company for $250M that just got a check for $2.4B. How exactly did this work?
Re: What the Windsurf sale means for the AI coding ecosystem
#3openai's $3b acquisition of windsurf falls apart. after months of negotiations, they walk away. That isn't accurate. Microsoft was an OpenAI investor and had rights and for MS reasons, exercised them. That's what killed the deal. google announces they're paying $2.4b to hire windsurf's ceo and 41 researchers for deepmind. not to acquire windsurf. just the humans. the same day openai walks. what a coincidence! That is…
> My question is what happened to the $2.4B?
Paying debitors and investors?
Re: What the Windsurf sale means for the AI coding ecosystem
#4The premise of this article seems to be that the researchers at Windsurf have been able to learn amazing things thanks to near unlimited VC money, increasing their value to astounding numbers.
That may be true (although I doubt the numbers add up). But what is keeping those researchers from walking away, or underperform whenever they feel like it? Giving them a lot of money surely isn't going to motivate them to work harder.
It's probably giving them access to one of the world's largest clusters of compute that lures them in.
Re: What the Windsurf sale means for the AI coding ecosystem
#5this reminds me when early on in Github Copilot journey when people were asking "what if it accidentally reproduces GPL code and I get sued" and Microsoft said they'll cover the legal costs for anyone using Github Copilot.
The big players (Google, Microsoft, Meta, Nvidia) don't want ai startups failing. In fact they are terrified of that. Can you imagine the market shock if windsurf just went under in 1 year. How fearful all investors would be? How the whole market is gonna react? We are told that AI is basically a money printer. If you release a product for $20/month and a couple of months later other companies (with much better margins by definition) release competitor for $250 then $300 then $400 something is clearly not adding up even among the higher numbers.
Re: What the Windsurf sale means for the AI coding ecosystem
#6Putting aside the model and researchers windsurf have, is the windsurf business model sound? If not, does potential acquirer think the business model can be adjusted within reasonable time to create value?
If the answer is no for the whole ecosystem, it’s going to be much harder to see acquisition of companies like this.
Re: What the Windsurf sale means for the AI coding ecosystem
#7openai's $3b acquisition of windsurf falls apart. after months of negotiations, they walk away. That isn't accurate. Microsoft was an OpenAI investor and had rights and for MS reasons, exercised them. That's what killed the deal. google announces they're paying $2.4b to hire windsurf's ceo and 41 researchers for deepmind. not to acquire windsurf. just the humans. the same day openai walks. what a coincidence! That is…
> My question is what happened to the $2.4B
We don't know what deal they made with the VCs, but they could have multiple liquidation preference agreements.
> A liquidation preference multiple (e.g., 1x, 2x) determines how much investors receive before any distribution to common shareholders. A 2x preference means investors are entitled to twice their initial investment amount before others receive payouts.
Re: What the Windsurf sale means for the AI coding ecosystem
#8this reminds me when early on in Github Copilot journey when people were asking "what if it accidentally reproduces GPL code and I get sued" and Microsoft said they'll cover the legal costs for anyone using Github Copilot. The big players (Google, Microsoft, Meta, Nvidia) don't want ai startups failing. In fact they are terrified of that. Can you imagine the market shock if windsurf just went under in 1 year. How fea…
Yep. And what happens next if Cursor goes under? I don't think the big ones let that happen, even though the business is not profitable.
Re: What the Windsurf sale means for the AI coding ecosystem
#9Windsurf was just a recent rebrand of Codeium which was founded in 2021 and had plenty of enterprise customers using their self-hosted models well before they decided to make an IDE. I think this article is surprisingly thin on background.
Re: What the Windsurf sale means for the AI coding ecosystem
#10The premise of this article seems to be that the researchers at Windsurf have been able to learn amazing things thanks to near unlimited VC money, increasing their value to astounding numbers. That may be true (although I doubt the numbers add up). But what is keeping those researchers from walking away, or underperform whenever they feel like it? Giving them a lot of money surely isn't going to motivate them to work…
> Giving them a lot of money surely isn't going to motivate them to work harder.
isnt that the reason we give ceos lots of money?