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OpenAI reaches agreement to buy Windsurf for $3B

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Re: OpenAI reaches agreement to buy Windsurf for $3B

#441

Post by raincole »

bufferoverflow wrote: post #412
blueboo wrote: post #269

Earlier quoted context omitted.

OpenAI needs a product team hiring is hard it's a high-functioning team swimming in contemporary design and eng practices code is emerging as an important battleground OpenAI has the $$$

I bet they can hire best minds in the world for a fraction of $3 billion.

JetBrains has been making IDE for a decade. They were the only company that actually made money by selling IDE. So I assume they have the best programmers who understand IDE.

However they fail to make a Cursor competitor so far. This alone suggests it's a harder task than meets the eye.

Re: OpenAI reaches agreement to buy Windsurf for $3B

#442

Post by jahewson »

johntarter wrote: post #432
moeadham wrote: post #428

Earlier quoted context omitted.

sometimes companies are acquired for things the public has not yet seen.

Companies are acquired for customer base, ARPU, and growth. Same criteria as when when raising funding.

Those are the best reasons, but companies are also acquired for marketing, hype, to relieve a sense of fear, to curry favour, etc…

Re: OpenAI reaches agreement to buy Windsurf for $3B

#443

Post by raincole »

retornam wrote: post #264
goodluckchuck wrote: post #250

Earlier quoted context omitted.

If OpenAI just provides AI, then the various IDEs development wrappers / IDEs / low-code etc. can collectively bargain against OpenAI for low rates. If OpenAI has an alternative, then they can charge higher rates for all plugins/ etc. and give the market an alternative.

If enterprises require fewer software engineers, where will the market for IDE development wrappers come from?

Enterprises won't require less software. If they require fewer software engineers, that would be those few engineers producing so much more software with better tools, for example, AI wrappers.

Re: OpenAI reaches agreement to buy Windsurf for $3B

#444

Post by jychang »

theturtletalks wrote: post #328
jychang wrote: post #308

Earlier quoted context omitted.

Roo/Cline doesn't offer Openrouter, markup or not.

You can most definitely use Openrouter with Roo and Cline. Openrouter leaderboards are dominated by these 2 apps.

But they don't OFFER Openrouter a paid product... You cannot give roo/cline dollars and get openrouter api access.

Re: OpenAI reaches agreement to buy Windsurf for $3B

#445

Post by mrweasel »

johntarter wrote: post #433
retornam wrote: post #409

Earlier quoted context omitted.

Cursor purports $300M in annual recurring revenue (ARR) but stays silent on churn. They made $25M from subscriptions one month, took that number, multiplied it by 12, arrived at $300M and everyone has been running with that line without ever asking what their churn looks like. They could have churned $24M the next month, ask yourself why they are silent on churn if they are doing so well.

Venture capitalists aren't ignorant, their business revolves around knowing exactly what churn is. Cursor has raised $1 billion with a $9 billion valuation. VC's willing to put in that much money has looked at their data and knows what the retention rate is.

If their plan is to make their money back selling the company, then they don't care about revenue or retention rate. The company just need to look like it might be doing well.

No, venture capitalists aren't ignorant, but their goal also might not be to build and run a healthy company long term. It might be to turn a quick profit by selling a startup to another company.

Re: OpenAI reaches agreement to buy Windsurf for $3B

#446

Post by malthaus »

incorrecthorse wrote: post #80

It blows my mind OpenAI wouldn't be able to build a Windsurf alternative for orders of magnitude less than $3B.

they have an infinite war chest and building windsurf/cursor isn't the hard part, building a brand and sales environment around it is. why risk failing the execution and losing focus when you can just buy one with momentum?

it's also a bit of multiple arbitrage in terms of what seriously addressing the developer market means for their valuation, they likely recoup the 3b instantly.

Re: OpenAI reaches agreement to buy Windsurf for $3B

#447

Post by anonzzzies »

sagarpatil wrote: post #416
bko wrote: post #29

Incredible timeline to a $3B exit > Windsurf began in 2021 as Exafunction, founded by MIT graduates Varun Mohan and Douglas Chen. The company initially focused on GPU optimization before pivoting to AI-assisted coding tools, launching Codeium, which later evolved into Windsurf. > Series B (January 2024): $65 million at a $500 million valuation. > Series C (September 2024): $150 million, led by General Catalyst, at a…

I’ve been a WindSurf customer since day one. It was my first true AI agentic experience. [Dev mode] While working on Alembic migrations I broke one of my migration files. After an hour of manual debugging I handed the task to WindSurf. It methodically checked every config file, applied the migrations one by one, and narrowed the issue to a single file. It rewrote the migration, verified the fix, wrote tests, ensured…

> WindSurf, Cursor, and Aider. Augment Code also ranks above WindSurf for me.

Bring on (a lot) more competition! I am waiting for the point where "Simple Pricing" (Augment Code has that on the pricing page) means fixed pricing; Simple is NOT '600 messages included' because it's impossible to know what the ROI from those 600 messages is, so it's very far from 'Simple' (many of those prompts will deliver nothing or, worse, having to rollback because the agent produced garbage). I know it's not sustainable, but the only thing that will keep me not jumping from one to the other, signing up with different emails, trials, coupons etc is if they will lose the restrictions on usage. They will, as they have to compete and it's worth it seeing this acquisition; losing 10s of millions a month to get/keep people and getting nice growth is what they do to get the billions. So bring it on!

Re: OpenAI reaches agreement to buy Windsurf for $3B

#448

Post by conartist6 »

alexchantavy wrote: post #388
ignoramous wrote: post #382

Earlier quoted context omitted.

Bubble or not, given the exit, Windsurf's (Codeium) focus on enterprise sales motion has been rewarded rather handsomely: https://research.contrary.com/company/windsurf / mirror: https://archive.vn/ThWNz

Yeah, in the recent Lightcone Podcast episode, Varun was talking about how they have a lean eng team but large sales org. I thought that was super interesting for a dev tool since I was expecting a dev tool to involve bottom-up sales to the dev instead of top-down sales to a leader like a CTO or VP of Eng

It will be super interesting to see how they do against the inverse: an engineering-focused company that wants to win devs from the bottom up

Re: OpenAI reaches agreement to buy Windsurf for $3B

#449

Post by conartist6 »

worldsayshi wrote: post #435
lolinder wrote: post #246

Earlier quoted context omitted.

Part of what you're missing is that OpenAI needs to justify its own overinflated valuation. They raise money on the premise that an AI-native company can and will outcompete giant established players, so lowballing Windsurf would run counter to the narrative they're selling to their own investors.

So they are effectively blowing their own bubble?

That is what it looks like from where I sit, yes.

They built all of this assuming VSCode was a solid foundation for the next 30 years and I've completely undermined VSCode's technical foundations. Their castle is gonna sink into the swamp...

Re: OpenAI reaches agreement to buy Windsurf for $3B

#450

Post by conartist6 »

raincole wrote: post #441
bufferoverflow wrote: post #412

Earlier quoted context omitted.

I bet they can hire best minds in the world for a fraction of $3 billion.

JetBrains has been making IDE for a decade. They were the only company that actually made money by selling IDE. So I assume they have the best programmers who understand IDE. However they fail to make a Cursor competitor so far. This alone suggests it's a harder task than meets the eye.

It is, but you are assuming that only a well known IDE team would do it. To me JetBrains is the least likely to be an innovator here because they depend on their reputation for being a mature technology.

Someone like me isn't known at all but it means I have been able to experiment for a long time without pressure, which is how you do real innovation.

JetBrains as a company probably owns 10 million lines of code and it's just really hard to move fast when you're tugging that kind of ball and chain

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