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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

#471

Post by mike_hearn »

throw234234234 wrote: post #429
rpgbr wrote: post #268

Earlier quoted context omitted.

It's a bubble about to pop. That's where the value is coming from.

5 years ago if you said coding tools would be worth in the billions in value it would of been surprising to most people. Dev Tools were the thing you could never get a company to buy for you or were just free for most people. Interesting times.

Dev tools are still very hard to sell (I know, I have a dev tools company). Claude Code, Aider and Codex are given away for free. What people are buying is access to proprietary general purpose models.

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

#472

Post by bingemaker »

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…

Is there a writeup or a recording. Would be nice to follow through

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

#473

Post by blackoil »

retornam wrote: post #405
ergocoder wrote: post #364

Earlier quoted context omitted.

JetBrains makes $400M in revenue and is 10+ years old. Cursor is 1 year old and makes $300M in revenue. One is going to be valued at a much higher multiple than the other.

$400M in real revenue versus $300M in annual recurring revenue (ARR) are totally different things. Real revenue is money actually earned, while ARR just multiplies one month's subscription revenue ($25M) by 12, ignoring customer churn. Startups love flashing ARR figures because "$300M ARR" sounds impressive, but without knowing churn rates, they might never actually collect that full amount. JetBrains however collect…

Unless you have reason to believe the revenue is declining in recent months or will decline in near future, ARR is a better metric. last year real revenue made sense only for low growth companies.

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

#474

Post by mike_hearn »

ninetyninenine wrote: post #414
ergocoder wrote: post #364

Earlier quoted context omitted.

JetBrains makes $400M in revenue and is 10+ years old. Cursor is 1 year old and makes $300M in revenue. One is going to be valued at a much higher multiple than the other.

I feel jetbrains is squandering an opportunity here. Cursor is significantly easier to build then any IDE in the jetbrains ecosystem. The technology jetbrains is very hard to replicate. While the technology cursor uses should be trivial to replicate. If jetbrains can combine there IDE technology with cursor technology, that would be ideal. I think the problem is jetbrains tech is sort of already very biased in a cert…

JetBrains launched their cursor competitor a few weeks ago.

I prefer Claude Code still because it has access to more tools - Junie seems unable to fetch URLs and do other things. But that's a tiny gap that JetBrains can close quickly, and the Junie UI is quite pretty. Plus, inside the IDE they can equip the model with far more advanced tools than Claude Code will have from the CLI: inside Code Claude has to explore the codebase by banging stones together with ripgrep, whereas in the IDE it can be equipped with tools to access the indexes and navigate around like a human would.

In theory, JetBrains should be able to compete very strongly in this market. Their single line completion model is already excellent.

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

#475

Post by petesergeant »

mike_hearn wrote: post #470
adventured wrote: post #417

Earlier quoted context omitted.

They're paying $3 billion because money is hyper plentiful for OpenAI at present. Basically because they can. Money isn't their problem right now, it's not a scarce resource (maybe it will be in the future of course). They're trying to capture and lock-in, so as the hurdles and regulations go up they're one of the huge winners left standing. Try replacing Uber today, it's impossible. Nobody is going to give you billi…

Uber has already been replaced, at least in some parts of the world. We recently went on holiday to Malta and on check-in the hotel staff told us not to bother with Uber, Bolt worked way better and had more drivers (Bolt is a European Uber competitor based in Estonia). So we signed up for Bolt and sure enough drivers were plentiful, the app worked great and there was no downside over Uber. I'll certainly be trying it…

Uber feels like such an apt comparison to OpenAI to me. The service they provide is obviously going to be absolutely huge, but no guarantees at all that they’ll win it or be last man standing. I don’t see a world in which generative AI doesn’t continue to be a massive disrupting force, but no particular reason to think Anthropic or OpenAI will still be independent entities in a few years.

I’m even more bearish on Uber than I used to be, as someone who’s used Grab and Careem and Bolt extensively, and seen Uber have to beat a retreat from SE Asia. If their more nimble competition get a foothold in the US they’re toast.

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

#477

Post by levzzz »

avisser wrote: post #171
sidcool wrote: post #27

Earlier quoted context omitted.

That's a oversimplified view. It doesn't matter if it's a fork. It has customers and paying ones. And it has a brand. That's more than enough. $3 billion would be peanuts for OpenAI

> And it has a brand Didn't they change names months ago? I know them as Codeium.

[dead]

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

#478

Post by nailer »

retornam wrote: post #240

I'm skeptical about this VSCode fork commanding a $3 billion valuation when it depends on API services it doesn't own. What's their moat here? For comparison, JetBrains generates over $400 million in annual revenue and is valued around $7 billion. They've built proprietary technology and deep expertise in that market over decades. If AI (terminology aside) replaces many professional software engineers and programmers…

Steel man: Windsurf own the customer relationship. The models are just generic interchangeable services they use for processing.

Realistically: I don’t know how many users windsurf actually has and I never actually met anyone that uses them. Whereas Cursor AI took a huge percentage of the VS code users I know in real life.

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

#479

Post by senko »

dhc02 wrote: post #334
owendarko wrote: post #116

Earlier quoted context omitted.

There are already a bunch of open source, free, and popular "AI coding agent" extensions for VS Code: 1) Cline (1.4mil downloads) 2) Roo Code (a fork of Cline, 450k downloads) Still a drop in the bucket compared to Cursor in terms of # of users, but they're growing pretty fast. Disclaimer: I maintain Kilo Code, which competes with 1) and 2) so I'm pretty familiar with this space/the growth patterns.

I am constantly surprised how seldom aider is mentioned in threads like this. I understand that it's not directly integrated into the editor, but the "editor + parallel CLI tool chain" paradigm feels so natural to me because we drop to terminal for so many other parts of building software. If you haven't tried it (particularly the architect/editor modality), it's worth a couple of hours of experimenting.

Tight editor integration means better diffs (right in your editor), easier context manager, and other convenience features that CLI-only tools can't have.

This doesn't mean that aider, claude code, etc. aren't very good tools, but it does make sense to distinguish between built-in tools vs external ones. A similar non-AI example is debugging or linting: IDE integration makes it much easier than using a separate tool.

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

#480

Post by nailer »

retornam wrote: post #400
goodluckchuck wrote: post #380

Earlier quoted context omitted.

If software engineers are more effective, I would expect there to be more software engineers. They’ll put out more and better code. More code means more engineers. The contrary view is like saying gold miners are finding more gold, and it’s easier than ever, so we expect folks are going to leave town.

If your assertion was true, we would see a hiring boom across the board, instead of mass layoffs and hiring freezes throughout our industry

Someone, maybe it was Duolingo basically said: medium stuff is now easy, hard things are now expected of you.
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