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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

#581

Post by kbelder »

ninetyninenine wrote: post #552
itchyjunk wrote: post #537

Earlier quoted context omitted.

Could you elaborate? Power saw operators replaced traditional carpenter?

Of course any tool that makes a job easier means that less people are needed to do the same job. If demand doesn’t change the supply will naturally shrink. So hypothetically 1 man can cut wood but it takes him 2 days to do a big job. With a power saw it takes him half a day so his output on this section of the job is amplified by 4x. Any tool that makes his life more trivial increases his output and therefore increas…

You're right that it may have, and you're right that it's hard to quantify. But it is thoroughly possible that the increased productivity heightened demand. The ability to create more or better output for the same amount of labor can make some production feasible that wasn't before.

After all, in net, increased production has allowed us to have more. We aren't making do with the same amount of stuff and spending less. We're spending more, and receiving much more. That money is going to other people's pockets.

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

#584

Post by ergocoder »

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…

I don't think that distinction changes how much each of them is worth relatively to each other.

Achieving $300M ARR in 1 year is extremely extremely impressive regardless of churn or any other metrics really (assuming reasonable numbers). Being valued at $9B because of it doesn't seem out of line.

I'm skeptical of Cursor and not using Cursor myself. I actually use IntelliJ because I write Java.

Cursor's valuation is not unreasonable. But somehow you phrase it like $9B valuation for the fastest growing company that achieves the highest revenue per employee in the history of modern civilization is out of whack somehow.

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

#585

Post by twobitshifter »

fooster wrote: post #504
twobitshifter wrote: post #339

Earlier quoted context omitted.

there is now an integrated agent mode in vscode as of 3 weeks ago https://m.youtube.com/watch?v=dutyOc_cAEU&pp=ygURYWdlbnQgbW9...

I’ve used both extensively. Copilot agent just is not as good as cursor with Gemini 2.5. It is much much slower among other things.

Interesting Gemini 2.5 on both?

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

#586

Post by stevage »

beardedwizard wrote: post #154
stevage wrote: post #79

Earlier quoted context omitted.

They're not the champion of code hosting?

It's a close call - I make this based on the fact that GitHub is viewed as an anti-choice by some in the community, a huge change from the "you don't use GitHub?!?!" energy they had pre-acquisition. The MS acquisition traded the developer community to briefly appeal to enterprises, then quickly let both down.

I dunno, for me Github is better than it was pre-acquisition. Sure, the rate of improvement has slowed a lot, but they did fix some old annoyances. But come to think of it, I can't really think of any ways that it has enshittified. I don't use any of the CI/Actions stuff though.

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

#588

Post by dayjah »

pc86 wrote: post #527
dayjah wrote: post #520

Earlier quoted context omitted.

I was involved in an M&A once; my role was to evaluate the technology and determine how long it would take us to build a competitive product. If it was less than some X then we’d build it, greater than X and we’d buy. The function for X was not clear to me from my perspective; it had legal fees involved, etc. The person leading M&A said an intangible aspect of the price is what it does to the adjacent market. If the…

That's a really interesting thought, I'd love to get involved in software PE/M&A on the technical analysis side but I don't have the academic pedigree for it (it seems every shop that does this work is 90% Ivy and Ivy-adjacent universities and FAANG-level work history). So if I'm understanding your point then part of the value in paying $3B for Windsurf is that it acts as a pricing anchor on future raises (and presum…

You have superbly summarized the point I was trying to make regarding valuations.

Regarding your other point about pedigree: I’ve a high school level education. I was considered senior at this specific co. as I had played an important role in building the product (I’m a “classic case” of self taught generalist). I’m not at all clear on how I was selected to take part in that effort to be frank. It was fun.

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

#589

Post by dayjah »

foobarian wrote: post #563
dayjah wrote: post #520

Earlier quoted context omitted.

I was involved in an M&A once; my role was to evaluate the technology and determine how long it would take us to build a competitive product. If it was less than some X then we’d build it, greater than X and we’d buy. The function for X was not clear to me from my perspective; it had legal fees involved, etc. The person leading M&A said an intangible aspect of the price is what it does to the adjacent market. If the…

I would also think that a critical component of X there would be the opportunity cost of time spent on building in-house while competition chugs along.

For sure, as was the opportunity cost of redirecting our engineering teams to produce the competing product. That is, slowing the roadmap on our core product to deliver a tangential product.

Also, we had to factor into account user management, infosec bring-up, streamlining deployment, cross training teams, etc.

This was a large co., there was generally the belief that everything can be copied relatively quickly to reach something like parity. Obviously, the discovered path has tons more learning in it that the copier doesn’t benefit from when making subsequent decisions, which can result in lots of time lost.

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

#590

Post by fooster »

twobitshifter wrote: post #585
fooster wrote: post #504

Earlier quoted context omitted.

I’ve used both extensively. Copilot agent just is not as good as cursor with Gemini 2.5. It is much much slower among other things.

Interesting Gemini 2.5 on both?

I don’t think there is an option for Gemini with copilot
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