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OpenAI looked at buying Cursor creator before turning to Windsurf
- warthog 2y agoi wonder what the price was. If it was around $20 Bn which OAI could have afforded and okay to ask by Cursor guys, tough decision not to sell here. You are 25 yo and made $2.5 Bn in 4 years
- lowkey_ 2y agoFair, but worth noting the founders almost certainly already have gotten fat secondaries, and now have a chance to build something much larger if they can execute.
- InkCanon 2y agoStrongly suspect OAI can't afford 20B cash. Their latest funding round was 40B, and they're burning through money like it's rice paper. They could offer OAI equity, but Cursor's founders would probably be very suspicious of private valued stock (which is fairy money). How wise it is to buy Cursor is another question. Current valuation has them at 100x revenue. And I suspect agentic products will be a lot less cash flow positive than traditional SaaS because of the massive cost of all that constant codebase context and stream of code.
- sksxihve 2y ago> The initial funding will be $10 billion, followed by the remaining $30 billion by the end of 2025, the person said. But the round comes with a caveat. SoftBank said in an updated disclosure on Monday that its total investment could be slashed to as low as $20 billion if OpenAI doesn’t restructure into a for-profit entity by Dec. 31. They might not even get the full $40 billion
- blitzar 2y agoI would have assumed the same - earlyish stage comanies in this area will likely be happy to take a big wedge of openai stock and a little cash.
- Aurornis 2y agoRumors from yesterday were around $3 billion. They had raised a Series C investment recently. Historically that puts ownership of founders and employees at around 40%. Could be a lot higher for a hot AI company though. Given two founders, AI company, Series C, and a $3bn purchase price they could each have netted around $750 million in a good scenario. Less if they cashed out in secondaries in previous rounds (which would have been smart). Fantastic outcome for them, obviously. This is the 0.001% scenario that founders dream about.
- justanotheratom 2y agoRecently, OpenAI CFO Sarah Friar said, "We have something called A-SWE, which is the Agentic Software Engineer. And this is where it starts to get really interesting because it’s not just about augmenting a developer, like a Copilot might do, but actually saying, ‘Hey, this thing can go off and build an app.’ It can do the pull request, it can do the QA, it can do the bug testing, it can write the documentation." https://www.youtube.com/watch?v=2kzQM_BUe7E https://www.youtube.com/watch?v=2kzQM_BUe7E The relevant discussion about A-SWE begins around the 11:26 mark (686 seconds).
- foobiekr 2y agoAnd you believe this? Surely then they have no swe reqs right?
- justanotheratom 2y agojust stating facts.
- stefan_ 2y agoThe fact being that Sarah "CEO of Nextdoor" Friar stated they have this A-SWE vapor thing? I don't see how it pertains to what the said being factual.
- throwaway314155 2y agoYeah and respectfully the facts as stated leave the impression that she's full of shit and/or doesn't know what she's talking about. What she's saying is pure hype for investors probably. Vaporware.
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- wobblyasp 2y agoIf they actually had something like that they'd stop talking about it and release it. Until we play with it, it doesn't exist.
- nopinsight 2y agoOpenAI‘s early investment in Cursor was a masterstroke. Acquiring Windsurf would be another. Next advances in coding AI depend on real-world coding data, esp how professional developers use agentic AI for coding + other tasks. RL works well on sufficiently large base models as shown by rapid progress on verifiable problems with good training data, e.g. competition math, competitive coding problems, scientific question answering. Training LLMs on detailed interaction data from AI-powered IDEs could become a powerful flywheel leading to the automation of practical coding.
- kylehotchkiss 2y agoHow many developers want to have usage analytics of their editors helping companies build functionality that aspires to replace them? This is silly.
- nopinsight 2y agoMany of them likely won’t switch immediately. They could also try to keep them with sweet offers, like generous usage quotas, early access to the latest models, etc. Once sufficient data is gathered, the next generation models will be among the very best at agentic coding, which leads to stronger stickiness, and so on.
- palmotea 2y ago> How many developers want to have usage analytics of their editors helping companies build functionality that aspires to replace them? This is silly. Honestly, too many. Software engineers can be really, really dumb. I think it has something to do with assuming they're really smart. But even unwilling developers may be forced to participate (see the recent Shopify CEO email), despite knowing full well what's going on. I mean, tons of people have already had to go through the humiliation of training their offshore replacements before getting laid off, and that's a much more in-your-face situation.
- xp84 2y agoThe frustrating part is that this is another area where the realities of capitalism seem misaligned with anyone's well-being. Nobody wants to be out of a job, but doing the opposite of the Shopify CEO's strategy, like severely restricting AI usage, looks like a great way to ensure your competitors catch up with you and eat your lunch faster. I don't see any answers, just different ways to destroy ourselves.
- demarq 2y agoIf OpenAI buys windsurf I’m canceling my subscription immediately!
- tristanb 2y agoOh man - I love Windsurf, but only use Claude in there. This doesn't sound like great news to me.
- falcor84 2y agoI mostly use Claude, but have recently been playing with Gemini 2.5 and ChatGPT 4.1, and they've been great too, with slightly different strengths and weaknesses.
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- CalmStorm 2y agoI don’t quite understand why OpenAI would pay so much when there’s a solid open-source alternative like Cline. I tried both, and feel that Cline with DeepSeek v3 is comparable to Cursor and more cost-effective.
- gscott 2y agoPlus they already have a coding agent. This is beginning to feel like Yahoo 2.0. When you have just raised $40 billion and you spend $3 billion on a company that has a product that you also build that is dumb as rocks.
- KaoruAoiShiho 2y agoThat describes Google buying Youtube and Facebook buying WhatsApp, those seem to have turned out okay.
- gscott 2y agoWhatsApp is not profitable yet. At least not as October 2024. YouTube had the advantage of being able to post pirated videos something that I'm not sure Google would have been able to do. YouTube gained traction in ways Google couldn't duplicate.
- soulofmischief 2y agoPeople do this exact thing all the time. Facebook paid $1 billion for Instagram whenever Facebook's cash and marketable securities was only $9-10 billion, even though Facebook already had a mobile social media app.
- disgruntledphd2 2y agoThat was a mostly stock deal, right?
- soulofmischief 2y ago
- maille 2y agoAre there any similar solutions for MSVC? Almost all these tools are focused on VSCode.
- thefourthchime 2y agoJust open the root folder in cursor and it'll still do all the stuff for you. Just go build it in MSVC. This is how I build apps. I create an empty project in Xcode, and then I go over to Cursor and have it write all the code. And then I go back to Xcode to build and run it.
- aitchnyu 2y agoI was also shopping around second class Pycharm (from Jetbrains) extensions till I found Aider+Openrouter (Gemini 2.0 Flash costs at least 4x cheaper than Sonnet 3.7). I keep a terminal in sight to see what its doing, and leave comments `//do this ai` and tell it to act. All other AI assisted workflows feel clunkly now. https://aider.chat/docs/usage/watch.html https://aider.chat/docs/usage/watch.html
- dgellow 2y agoHave you tried Claude code? It’s of course more expensive but the terminal UI is fantastic
- threecheese 2y agoInterestingly I had an email from Windsurf a few days back suggesting I lock in an early adopter price, as they expected to release new pricing plans and increases. Related to a potential M&A from OpenAI? I’m less likely to follow their suggestion if they turn around and bake this into OpenAI’s product suite.
- baq 2y ago> Related to a potential M&A from OpenAI? related to locking in revenue, any dollar counts when your multiple is 100
- fidotron 2y agoThis is beginning to look a bit like OpenAI is becoming to startups what Facebook was in the Instagram and WhatsApp era. Back then Facebook were far more established, and mobile was a big catalyst, but the sums being mentioned here are very large. We should all start building the products that we think will terrify OpenAI most.
- matchagaucho 2y agoThe difference, though, is these AI IDE startups are essentially built on a fork of Microsoft VS Code. And MSFT has many end game options to dump free IDEs on the market with integrated AI.
- indigodaddy 2y agoTo followup on this train of thought, I feel like it might be game over for everyone else if Google decides to release their own VS code Cursor-like clone and stays consistent with the incredible context and free tier for Gemini Pro that you currently get from online/webui Gemini and Google AI studio. The question is do they want to go in that direction? (And also if they do, do they only allow Gemini model or do they open it up to a choice of various models (to also include models not related to Google/Gemini) and/or BYOK). I don't see why not because I believe they will slaughter Cursor, Windsurf, et al if so ...
- falcor84 2y agoGoogle have https://firebase.studio https://firebase.studio (originally idx.dev), which they recently updated, so I'd assume that they wouldn't want to cannibalize that.
- indigodaddy 2y agoDon’t see why they can’t offer a local option as well
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- basisword 2y agoI can see why they’re doing it. If I use Cursor I can pick the best model - I’m not stuck using OpenAI if someone outperforms them. If they own the tools they can takeaway that choice.
- OxfordOutlander 2y agoIt makes sense for OpenAI to overpay for wrapper companies that have distribution - a good analogy is British pub (bar) companies. By mid 2000s they were struggling. Low margins, rising cost base, expensive debt. What saved them? Heineken. They didn't care if the pubs made much of a profit - they made positive margins on having people drink their beer at market prices. They just wanted to increase volume. So they bought up several major players. In 2008 they acquired Scottish & Newcastle's operations, later thought bought Star Pubs & Bars, which had 1,049 leased and tenanted pubs, and finally half of Punch Taverns. The same strategy can work for OpenAI - buy up the wrapper companies, and make sure YOUR models are served to the user base.
- somerandomness 2y agoVS Code fork 'default model' is the new default search engine
- bluelightning2k 2y agoNice analogy. Although a simpler way to say it is simply vertical integration, a known term for the phenomenon with a whole class of benefits. One of those benefits brings to mind another analogy: Apple. The ai model and the tooling are kind of like the hardware and software. By co-developing them you can make a better product and certainly something hard to compete with.
- abxyz 2y agoAn apt analogy, given... "The company must change its mindset and become proactive in its approach to compliance. I have decided this can best be achieved by the imposition of a sanction that will serve as a deterrent to future non-compliant conduct by Star and other pub-owning businesses." https://www.gov.uk/government/news/heineken-pub-company-fined-after-seriously-breaching-pubs-code https://www.gov.uk/government/news/heineken-pub-company-fine...
- gabes 2y agoThis is exactly what I would do too if AGI was just around the corner.
- fpgaminer 2y agoUsability/Performance/etc aside, I get such a sense of magic and wonder with the new Agent mode in VSCode. Watching a little AI actually wander around the code and making decisions on how to accomplish a task. It's so unfathomably cool.
- siva7 2y agoOhh how cute. Until this small thing grows bigger and bigger and replaces you one day
- PUSH_AX 2y agoBuying a VSCode fork for billions seems wild to me, but hey.
- paxys 2y agoIt's funny that in under a year we went from Sam Altman publicly saying that OpenAI was going to "steamroll" startups that were building products within its blast radius to now offering multiple billion dollars for those same startups.
- skinner_ 2y agoMy uninformed and perhaps overly charitable interpretation: he warned them they were going to be steamrolled, they built their product anyway, and now OpenAI is buying them because (1) OpenAI doesn't want the negative publicity of steamrolling them all, and (2) OpenAI has the money and is a bit too lazy to build a clone.
- square_usual 2y agoHoly shit, what are these numbers? $3B for Windsurf? Windsurf doesn't even have models of its own, or any fundamental research, it's mostly a wrapper around an editor (that is becoming hostile to wrappers, btw) and prompts. How can anyone look at the amount of money flowing around here and think this is rational?
- redbell 2y agoI'm not entirely sure if this strategy will work out well for OpenAI. In my opinion, an AI company, especially in its early stages, should focus intensely on refining and expanding its core products—those they plan to monetize through APIs—rather than diverting resources toward acquiring wrapper companies. Cursor, for instance, gained traction by embedding Anthropic's Claude Sonnet model to automate programming tasks. If OpenAI were to acquire Cursor or a similar IDE, a key question arises: would they keep it open to other models, or would they restrict it to OpenAI's ecosystem? Additionally, there’s speculation that OpenAI might be venturing into social media (https://news.ycombinator.com/item?id=43694877 https://news.ycombinator.com/item?id=43694877). If true, this could open up numerous competitive fronts that the company may struggle to handle effectively. They’re already dealing with fierce competition in their core business, so expanding too quickly into unrelated areas could spread their focus and resources too thin, potentially weakening their competitiveness in unfamiliar markets.
- dimitri-vs 2y agoThis to me is a strong indicator that they are seeing the limits of current architectures and don't have a good solution to scaling to AGI.
- segmondy 2y agoSo no AGI? and AI is not good enough to replace their programmers? Or... do they need more coding data from programmers to train their models?
- ipnon 2y agoI find your lack of faith disturbing.
- bhl 2y agoWhat's the hard technical aspects of building a product like Windsurf or Cursor? I've only seen codebase indexing or generating embeddings with Turbopuffer. There has to be more magic to that, right?
- viraptor 2y agoOn the agent side it's just the UI and LLM wrapper really. But the completion is a completely different custom thing. There's a video of the cursor team on Lex Fridman where they mention a few details https://youtu.be/oFfVt3S51T4 https://youtu.be/oFfVt3S51T4
- coopermichele85 2y ago[dead]
- bionhoward 2y agoI’m hopeful the Windsurf folks see reason and refuse this deal, because OpenAI’s prohibition on learning is absolutely insane to force on devs, isn’t it?
- AriUgwu 2y agoI like Windsurf and that is an _odd_ feeling. In part because it does feel like I’m working with a very smart junior developer. It allows me to do documentation driven design in my hobby work and as a result has restored a great deal of joy in that process. Genuinely a surprise for me. Tried all the front runners and only Windsurf gave me this feeling. Happy for their success. Less happy that my current $10/mo sub might get locked behind a $$$ bundle because someone in the OpenAI c-suite said “Finally, some steak to help sell our sizzle!”