17 ms·

OpenAI reaches agreement to buy Windsurf for $3B

667 points by swyx 1y ago

sidcool 1y ago
Now their models may have limits on how VS code and Cursor use it. Competition heating up!
throwaway984393 1y ago
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dtagames 1y ago
https://archive.ph/ocXFo https://archive.ph/ocXFo
jeanlucas 1y ago
oh wow, meaning I won't need to pay for Windsurf? What do you think will be the monetization path for this?
- deleted 1y ago
  [deleted]
- nialse 1y ago
  Probably the other way around. Windsurf and co (Aider, Cursor) drives a heap of traffic to their API from which OpenAI actually profit. They just need to have their own tool to lock customers in their ecosystem.
bionhoward 1y ago
Dumb, fail for user freedom, nothing owned by OpenAI can be used to … create AI or anything that competes with them: scheduled AI, AI agents, AI tools, AI coding, chat, audio, image gen, video gen, shopping, and oh, anything the AI can do, soon social networking and hardware, what’s left that doesn’t compete with these assholes? ChatGPT is a great breakthrough but it’s wasted if everyone has to worry about a noncompete with it. Seriously, how is it not insane to think we should outsource our thoughts and agree never to use the thoughts to compete with the thinker? Who wants to live in a world where nobody thinks and nobody can make anything competitive with their “Saviour Machine?” Anybody who would join an org like that for a few billion dollars is a sell out. It’s an AI safety nightmare, too. I’m just flabbergasted millions of noobs accept not to compete with intelligence, wtf is this world, if you can’t use your thoughts to compete with your thinker, what is left for you? lol this is worse than black mirror
- frabcus 1y ago
  Where's this non-compete clause? In ChatGPT T&Cs?
deleted 1y ago
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bartimus 1y ago
They didn't even buy an IDE since windsurf is more like a VS code plugin. So what was it exactly that was worth the 3B that they couldn't replicate themselves? Their prompts? Their training sets? Their users or user data?
- thomasfromcdnjs 1y ago
  I'd guess the prompts and employees. I've found Windsurf more reliable/efficient than any other editors by leagues. How ever they have named the tools, crafted their prompts and generally how their internals reason is just on the money. I don't think that is easy to replicate, iterating on prompts over product releases whilst not pissing off your user base constantly is a feat in of itself.
  - bartimus 1y ago
    Then perhaps it's about bringing in the human talent that wrote those prompts.
- XCSme 1y ago
  To be honest, Windsurf doesn't work like half of the time, so it's more likely their users, the data, and their branding/marketing potential.
- TiredOfLife 1y ago
  Windsurf/Codeium plugin is at least 3 years old.
- patapong 1y ago
  Maybe time? OpenAI has access to basically infinite capital right now, if they believe this will be an importnat market and they could save a few months on launching this acquisition may be worth it for them.
KhazAkar 1y ago
Pure speculation without official voice.
infecto 1y ago
Windsurf probably sees this as a win. I still think they're behind in some areas, Cursor's Agent feels faster and more responsive but Windsurf nails the rest. The documentation is far better, and the overall developer experience is more solid. Cursor still feels like a hacked-on plug-in in a broken VS Code fork. Even small touches, like built-in Linux install instructions, show Windsurf's polish.
- h8hawk 1y ago
  In my experience, Windsurf was significantly more effective when working with a big codebase.
  - whywhywhywhy 1y ago
    Windsurf goes looking into the codebase and learning context before attacking the problem in my experience. Often Cursor tries it's best to just guess the solution without context and only really resorts to going deeper when you tell it they fails. I find if I tell Windsurf to look at something it will, Cursor I sometimes lay everything out for it and it just doesn't even read it. Ultimately though once you run out of requests on Windsurf it's very weak without Claude though, and the top up requests are burnt through too quickly.
    - pbowyer 1y ago
      I trialled Cursor for a month and then Windsurf. Cursor read entire code files in while Windsurf would read the first 100 lines (or was it 50?), then the next 100, and often stop before it got to the part of the file with the method in which was needed. So I went back to Cursor.
      - whywhywhywhy 1y ago
        Think how inconsistent this all is becomes one of the most frustrating parts of it.
  - knes 1y ago
crimsonnoodle58 1y ago
$3B for a fork of an IDE which Microsoft keeps crippling by the day by making it's best extensions not work with forks (eg. C++, Python, C#, Remote SSH, etc)..
- deleted 1y ago
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- sidcool 1y ago
  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
  - avisser 1y ago
    > And it has a brand Didn't they change names months ago? I know them as Codeium.
    - levzzz 1y ago
      [dead]
  - codyvoda 1y ago
    given that they lose >$4B/year I guess everything is peanuts
    - mrweasel 1y ago
      OpenAI have $40 billion in funding from SoftBank for the next two years, so they can afford to buy Windsurf. Is OpenAI worth the $260 billion valuation... No, of course not, they're losing >$4 billion a year.
      - dbbk 1y ago
        That $40 billion is actively being spent being lit on fire to serve all the ChatGPT requests though. It's not just sat in the bank doing nothing.
hotpepperishot 1y ago
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bix6 1y ago
~$40M ARR makes this a 75x Cursor yesterday was a 45X for comparison (9B, 200M) https://techcrunch.com/2025/04/16/openai-is-reportedly-in-talks-to-buy-windsurf-for-3b-with-news-expected-later-this-week/ https://techcrunch.com/2025/04/16/openai-is-reportedly-in-ta...
- chipgap98 1y ago
  Growth rate matters a lot though. If they are growing quickly that multiple reduces quickly
  - lispisok 1y ago
    Easy to grow when you're selling one dollar bills for 75 cents
  - bix6 1y ago
    You think they can double every year for the next 5 years?
- airjason 1y ago
  keep in mind a lot of $3B is ClosedAI paper money, so 75x ain't that ridiculous.
  - bix6 1y ago
    Do you know the cash / equity split?
    - moralestapia 1y ago
      I do know that OpenAI doesn't have 3B in cash to just throw around. So, I'd be inclined to believe the vast majority of the deal is stock (or whatever that is called pre-IPO).
      - arrowleaf 1y ago
        Companies don't do these acquisitions with cash on hand. It's OpenAI and the whole pool of their creditors and investors.
Androider 1y ago
Windsurf and Cursor feel like temporary stopgaps, products of a narrow window in time before the landscape shifts again. Microsoft has clearly taken notice. They're already starting to lock down the upstream VSCode codebase, as seen with recent changes to the C/C++ extension [0]. It's not hard to imagine that future features like TypeScript 7.0 might be limited or even withheld from forks entirely. At the same time, Microsoft will likely replicate Windsurf and Cursor's features within a year. And deliver them with far greater stability and polish. Both Windsurf and Cursor are riddled with bugs that don't exist upstream, _especially_ in their AI assistant features beyond the VSCode core. Context management which is supposed to be the core featured added is itself incredibly poorly implemented [1]. Ultimately, the future isn't about a smarter editor, it's about a smarter teammate. Tools like GitHub Copilot or future agents will handle entire engineering tickets: generating PRs with tests, taking feedback, and iterating like a real collaborator. [0] https://www.theregister.com/2025/04/24/microsoft_vs_code_subtracts_cc_extension/ https://www.theregister.com/2025/04/24/microsoft_vs_code_sub... [1] https://www.reddit.com/r/cursor/comments/1kbt790/rules_in_496_major_issues_uncovered/ https://www.reddit.com/r/cursor/comments/1kbt790/rules_in_49...
- onlyrealcuzzo 1y ago
  > At the same time, Microsoft will likely replicate Windsurf and Cursor's features within a year. And deliver them with far greater stability and polish. We've seen this before with Office. We'll see it again.
  - rvz 1y ago
    ...as done with Teams. Microsoft Build is this month [0] and it will tell where they are going next (other than price cuts). I'm expecting disappointment for now, but also expecting GitHub Copilot to be upgraded. Then we'll see if they are ahead or so far behind. [0] https://build.microsoft.com/en-US/home https://build.microsoft.com/en-US/home
    - rvz 1y ago
      Well well well: [0] [0] https://code.visualstudio.com/blogs/2025/05/19/openSourceAIEditor https://code.visualstudio.com/blogs/2025/05/19/openSourceAIE...
bko 1y ago
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 $1.3 billion valuation. > May 2025: $3 billion acquisition from OpenAI I wonder how much of the value is really from the model or the tooling around it. They all use the same models (mostly Claude, others have been horrible and buggy in my experience). Even co-pilot agent mode now uses Claude. The editor has their own LLM (?) that does the apply since LLMs often return snippets. They work well enough on Cursor. And then you have the auto-complete, which I think is their own model as well. But the main value from me is from the agent mode and 95% of the value is the underlying model. The other stuff could be more or less a VS Code plugin. The other benefit is the fixed pricing. I have no idea how much 500 calls cost if I were to use the API, but I expect they're probably losing money.
- bfeynman 1y ago
  talented and smart folks for sure but can't not notice how much luck it is especially because its like 100% just better models. Windsurf raised a ton of money and then said they pivoted which they had millions raised to just do something completely different that likely wouldn't have been easier to raise for. Even in an interview with the cursor founder he kind of dumbly rambles that they launched and then basically lost a ton of traction until GPT4 came out. They have some core features like autocomplete but I'm struggling to see vision other than getting training data for iterative dev is a partial moat compared to just seeing commits and final code bases.
  - deleted 1y ago
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  - sigmoid10 1y ago
    Training data is almost certainly their main reason for this acquisition. Users themselves and the models they use don't really matter. What matters is their interactions with the models. Especially if you're trying to build coding agents that will be marketed to companies for $10k a month. OpenAI is going for the industry B2B opportunity here, not consumers or end users.
seydor 1y ago
This may end up saving openAI. their models have no moat
- blitzar 1y ago
  The companies they are buying have even less moat than openAi
whazor 1y ago
From a customer point of view it makes sense to pay a fixed monthly price for both chat and coding, instead of having two separate subscriptions.
- mark_l_watson 1y ago
  Question: has there been any announcements of bundling Windsurf with the ChatGPT $20/month package? (I could not access the linked article)
- mrweasel 1y ago
  That makes a lot of sense, for the customers, but OpenAI is not profitable on even their $200 subscription. I doubt Windsurf is turning a profit either. Buying a "bundle" should result in a lower price, as compared to buying both tools separately, making the loses worse. Unless they can reuse some of the same infrastructure and save a lot of money that way.
rvz 1y ago
Very surprising outcome, since OpenAI went after Cursor (twice) [0] And I originally thought that Cursor would be bought instead a day before the rumour [1]. It was smart for Windsurf to take the offer and to get greedy in this hype cycle. Unless Cursor is thinking that Anthropic or someone else will buy them for a lot more, its going to get extremely competitive as the switching cost for Cursor is zero and that ARR can disappear very quickly. Copilot will attempt to destroy Cursor on price and functionality for however long they want to. Very risky for Cursor at $9B valuation (which I think is overvalued and based on VC FOMO). [0] https://techcrunch.com/2025/04/17/openai-pursued-cursor-maker-before-entering-into-talks-to-buy-windsurf-for-3b/ https://techcrunch.com/2025/04/17/openai-pursued-cursor-make... [1] https://news.ycombinator.com/item?id=43698819 https://news.ycombinator.com/item?id=43698819
- returnInfinity 1y ago
  sometimes products stick, like slack, dropbox, box cursor may survive
- rvz 1y ago
  *not get greedy.
neonate 1y ago
https://archive.md/l6n9H https://archive.md/l6n9H
brap 1y ago
Recent announcements from OpenAI seem to indicate they know they're losing the race
- dr_dshiv 1y ago
  You are referring to the nonprofit continuation? They have certainly lost the monopoly.
lolinder 1y ago
The next step for Cursor and Windsurf both is that they need to work together to provide an answer for what it means to be a VS Code fork in the new era where Microsoft is trying to strangle the forks. If they're not already they should be teaming up with each other and with the VSCodium team and with the Open VSX marketplace. Microsoft is an existential threat to their model here, but with the money they each have coming in they together have the opportunity to make the whole ecosystem better by building out viable infrastructure for all VS Code forks, if they can cooperate.
- SwtCyber 1y ago
  There's a real opportunity here to build a sustainable, open ecosystem for AI-powered dev tools - but it's going to require actual coordination, not just parallel efforts
xnx 1y ago
"$3B" should be in heavy quotes if this is paid in OpenAI shares.
- singularity2001 1y ago
  probably paid in pro accounts
KhazAkar 1y ago
[flagged]
tom_y 1y ago
Fortunately it is not the cursor. I am using the cursor and I don't want it to be sold.
releaslot 1y ago
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Oras 1y ago
Good for them, always rooting for startups who win. That said, I have tried Windsurf multiple times, and it wasn't a pleasant experience compared to Cursor, which I've been using for more than 6 months as a paid customer.
incorrecthorse 1y ago
It blows my mind OpenAI wouldn't be able to build a Windsurf alternative for orders of magnitude less than $3B.
- mrweasel 1y ago
  Why didn't they just use ChatGPT to build it? Weird.
  - singularity2001 1y ago
    it would be only a few millions if they used cursor and Claude but their ego prevented it
  - bayarearefugee 1y ago
    Sometimes it almost seems like the idea that LLMs are capable of instantly creating real, maintainable software is vastly overblown to inflate valuations...
    - lispisok 1y ago
      Somebody didnt read their daily PR article about how CEOs are replacing entire teams with a few "rockstars vibe coding with AI"
- michelb 1y ago
  They can, of course, but why would they waste time on it? They are buying a tool, talent, and a heap of paying enterprise customers. This is a steal.
  - echelon 1y ago
    And they're probably buying it with equity, not cash.
  - yoyohello13 1y ago
    According to the various CEO's saying AI give 100x speedup they could just have one dev whip it up in a weekend no?
xyst 1y ago
An _ide_ sold for $3B? VCs and other early investors got their 1000% ROI on this one.
- cokeandpepsi 1y ago
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ujkhsjkdhf234 1y ago
I need someone to convince me this isn't one of the biggest waste of money on an acquisition. If OpenAI can't build an official IDE for less than 3 Billion then what are they even doing? Windsurf can't have that high of a userbase that you feel the need to pay for it.
- ashish01 1y ago
  > one of the biggest waste of money on an acquisition. I think that was when intel acquired McAfee for 8B in 2010.
  - insane_dreamer 1y ago
    MSFT buying Nokia for $7B is runner up. But at least it could have worked if MSFT hadn't burned it down. Intel and McAfee makes no sense at all.
- fazeirony 1y ago
  you mean the company that spent $9B to make $4B in 2024? that openai? i agree with you on this - it seems that openai hallucinates reality as much as their products do :-/
- singularity2001 1y ago
  instinctively I agree but it's all about timing: if they try to build their own IDE and hired people it would probably still take a couple of years to get a decent product. I don't know about patents.
  - mdaniel 1y ago
    > if they try to build their own IDE and hired people Oh, haven't you heard? Hiring people to write software is so last decade. Maybe they just didn't want to vibe code a Windsurf implementation and decided to buy a press cycle for $3B
- JumpCrisscross 1y ago
  We don’t know how OpenAI is paying. A lot of comments seem to be assuming this is an all-cash deal. We have no evidence for that.
resters 1y ago
- A $3B signal that OpenAI is unable to do product - AI assisted coding is mostly about managing the context and knowing what to put in the context to avoid confusion and dumb mistakes, it's not about the UI. - This signals that OpenAI believes that highly effective coding assistant LLMs will become a commodity / open source and so UI / tooling lock-in is a good investment.
- herval 1y ago
  chatgpt is massively popular, I'm not sure that's the signal I'd get they're acquiring one of the biggest the front doors to developers, with Windsurf - whether it'll _remain_ in fashion or not, that's a different debate. This can be like facebook acquiring instagram (if developers turn out to be the actual profit-driver niche for LLMs, which currently seems to be the case)
  - resters 1y ago
    > developers turn out to be the actual profit-driver niche for LLMs AI is definitely huge for anyone writing code, though one can imagine a model like o3 completely replacing 90% of white collar jobs that involve reading, writing and analysis. Interestingly, o3 is particularly bad at legalese, likely not fully by accident. Of all professions whose professional organizations and regulatory capture create huge rents, the legal profession is the most ripe for disruption. It's not uncommon for lawyers to bill $250 to $500 per hour for producing boilerplate language. Contracts reviewed or drawn up by lawyers never come with any guarantees either, so one does not learn until too late that the lawyer overlooked something important. Most lawyers have above average IQs and understand arcane things, but most of it is pretty basic at its core. Lawyers, Pharmacists, many doctors, nearly all accountants, and most middle managers will be replaceable by AI agents. Software engineers are still expected to produce novel outputs unlike those other fields, so there is still room for humans to pilot the machine for a while. And since most software is meant to be used by humans, soon software will need to be usable by AI agents, which will reduce a lot of UI to an MCP.
    - noitpmeder 1y ago
JSR_FDED 1y ago
What’s the equivalent in the Vim world?
- TiredOfLife 1y ago
  https://windsurf.com/vim_tutorial?extensionName=vim https://windsurf.com/vim_tutorial?extensionName=vim
owendarko 1y ago
We're reaching a point where we don't need to switch to another IDE (from VS Code/IntelliJ/insert-your-IDE-here) for "AI/vibe coding" IDEs can support "AI coding agents" on their own. The entire workflow for "AI coding agents" boils down to: 1. You write a prompt 2. The "agent" wraps it in a system prompt and sends it to the LLM 3. The LLM sends back a response 4. The agent performs specific actions based on that response (editing files, creating new ones, etc.) Microsoft already started doing that with Copilot. And they have a vibrant ecosystem of VS Code extensions (I maintain one of them [1]) "AI agents" should be a feature, not a separate piece of software (IDE) that's integral to software devs. [1] https://github.com/Kilo-Org/kilocode https://github.com/Kilo-Org/kilocode
- deleted 1y ago
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- deleted 1y ago
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remoroid 1y ago
Windsurf is terrible, I always use AI just in a normal website and I tried this product a few days ago and it asks me if it can run a command to make a file, which I find extremely strange, then it fails to write valid commands even to do mkdir.
- visarga 1y ago
  It worked allright for me when I was using it, a month ago. I cancelled because they somhow lost my paid credits and refused to refund me. No matter how great an AI tool, if the company is mismanaging user payments or usage tracking, it is useless.
- andai 1y ago
  That was my experience with OpenAI's Codex auto-coder thing (running o4-mini). It took 5 minutes and like 200 commands to do what Gemini 2.5 Flash (not even Pro!) did in about 30 seconds. I see LLMs trying to do stuff that doesn't work in every AI coding thing I've tried, despite 20 pages of system prompts! (Or perhaps because of it.)
robertclaus 1y ago
A lot of this valuation must be aqui-hire and existing users, right? 6 months of development lead time can't be worth this much... can it?
istjohn 1y ago
I wonder how much of this is a data play for OpenAI as they work to improve language model performance on longer time horizons.
deleted 1y ago
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fcanesin 1y ago
OpenAI knows that everyday someone uses Gemini their ChatGPT brand dies a bit faster. Wonder what Google has in storage for I/O now in May, would be a death sentence to just steamroll with Gemini-3.
- ukuina 1y ago
  So soon after Gemini 2.5?
- xnx 1y ago
  > Wonder what Google has in storage for I/O now in May "Gemini 2.5 Pro Preview (I/O edition)" https://news.ycombinator.com/item?id=43906018 https://news.ycombinator.com/item?id=43906018
  - fcanesin 1y ago
    LMAO, like one hour after. And guess what, it is a coding upgrade .
- qoez 1y ago
  Google IO in may? Guess we'll be getting a huge OpenAI release May 19th then. Edit: Oh of course, it's the open weights model they've been teasing.
- andai 1y ago
  They launched a new version of Gemini 2.5 Pro today. https://developers.googleblog.com/en/gemini-2-5-pro-io-improved-coding-performance/ https://developers.googleblog.com/en/gemini-2-5-pro-io-impro...
- casey2 1y ago
  Open AI needed to spend $3B pivoting away from bigdata based AI. But instead they went for the most shorted sighted move possible of snapping up the "trendiest" company nobody has ever heard outside the Ycombinator echo chamber. Typical VI-fallacy BS. If LLMs were actually good they would replace IDEs completely not be integrated.
ashvardanian 1y ago
If I recall correctly from the recent YC interview, the Windsurf founder noted their team leans more toward GTM than engineering. That makes this less likely to be a classic acquihire (as with Rockset) and more plausibly a data play rather than a product integration. My current read is that this is a frontier lab acquiring large-scale training data—cheaply—from a community of “vibe coders”, instead of paying professional annotators. In that light, it feels more like a “you are the product” scenario, which likely won’t sit well with Windsurf’s paying customers. Interesting times.
- simple10 1y ago
  Agreed. It seems like a data play and a hedge to beef up vibe code competition against upcoming Google and MS models so OpenAI doesn't lose API revenue. I would assume vibe coding consumes more tokens than most other text based API usage.
bradley13 1y ago
M&A activity needs much more strongly regulated. Buying up potential competitors is how we get monstrosities like Microsoft and Alphabet.
- chipgap98 1y ago
  In what world is Windsurf an OpenAI competitor?
throwaway7783 1y ago
This is probably a response to Claude Code, which is still experimental and terminal-only. In my experience Claude Code is fantastic, both for answering questions about the codebase and coding.
- ccheney 1y ago
  OpenAI has Codex CLI https://github.com/openai/codex https://github.com/openai/codex
knes 1y ago
does that mean that Windsurf will only support OpenAI models going forward? I doubt OpenAI will pay to have users use Gemini/Claude? Especially as all of these Ai coding tools (Windsurf, Augment, Cursor) are heavily subsidizing the users. I wonder what Anthropic makes of this. Windsurf was like a top 3 customers of them, might be a big revenue blow too?
- ukuina 1y ago
  Maybe Anthropic will buy Cursor to level the field.
- owebmaster 1y ago
  The queries made to other models is the juice of the data they will have access.
animanoir 1y ago
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_pdp_ 1y ago
I cannot pretend that I know what is going on - I don't. I think the long-term play here is something to do with Agents and they are simply cornering the market because coding tools are part to it. That being said, quick search around what people are building with these VIDEs reveals mostly landing pages that are actually not even that good. For the amount of money spent one could have easily bought a good template or pay someone to customise an existing one. I don't know. Maybe I am dumb.
redbell 1y ago
Ok, now I have a question: Will OpenAI keep Windsurf open to third-party models, or will they limit it to their own models only?
sidgarimella 1y ago
probably a rare area I fully agree with HN on– the IP here seems weak and it's not hard to swap out code editors, nothing like tearing out Salesforce or other sales-driven tooling. and idk if first mover advantage actually means much in the next 10 years given how dynamic the underlying models are. but undeniably these cos are all a great lesson in just how much cash lies in executing first/near first
dbreunig 1y ago
What is Windsurf's (or for that matter: Cursor, Cline, or CoPilot) moat? This seems like a great deal and timing for them.
D4ckard 1y ago
I don't get why people want the AI right in their editor. In another windows inside the editor, fine, but not inline with code I'm writing. It's super distracting to have AI auto complete pop up at random all the time. As always, typing speed, or speed at generating raw code, is not the bottleneck in programming. The crux remains design, in which case having the LLM on the side is just fine (if you use it for that). There are some niceties about inline completion (like spelling out a log message that's obvious from the surrounding code) but I don't get the hype much beyond that. Maybe I'm missing some feature though ...
- echelon 1y ago
  Have you tried it recently? AI autocomplete is the best thing I've experienced in developer experience in my career since git won over subversion. I don't use LLM code prompting, but autocomplete is my jam. It's getting things right 90% of the time when I'm plumbing fields or refactoring. It makes life so much more pleasurable, and I say that as someone who is already using a statically typed language with robust IDE refactoring capabilities. It's absolutely made me more productive.
  - pknerd 1y ago
    I am happy with Copilot with VSCode..I do not think so, I would need to let AI generate the entire code. Even if I need, I copy/paste from Claude/GPT
- tomjen3 1y ago
  If you have tried the completions in copilot, you are right. They are complete garbage. Windsurfs on the other hand are much better. The only issue is that windsurf is super aggressive about them, but it is able to do do things like "the user made a change on this line, he most likely also want to make the change here".
sensanaty 1y ago
You'd think with all these super hyper advanced AI tools they're shitting out they would be able to make a mediocre VSCode extension of their own instead of flushing 3B down the drain. Guess that's slightly out of reach of their "AGI"s though.
crsv 1y ago
Man why did these guys do that OpenAI couldn’t replicate for less than 3Bn on reasonable timeline? This seems insane.
- lnenad 1y ago
  They've got users (which I don't doubt that OpenAI's fork of VSC would have as well but I assume that's their thought process)
  - AlwaysRock 1y ago
    Yup. Even a small market share is market share. Plus they are paying to acquire a team of folks who are already in this space and who will, until golden handcuffs come off, keep working in this space. Still an insane number though.
    - mirekrusin 1y ago
      But openai is stronger brand with free publicity - whatever they say/do will instantly show up the same day on all news across the world. The "space" exists for months, there are no people with 10y expertise here, with their brand they can attract any talent they can wish for in this "space", no? You can probably vibe code 80% of it in a week or two?
      - owebmaster 1y ago
        > You can probably vibe code 80% of it in a week or two? Apparently, no. And the low quality of all OpenAI apps is proof of that.
      - AlwaysRock 1y ago
        I guess it's all up to interpretation, but having a brand in one space doesn't necessarily translate to a brand in another. OpenAI doesnt/didnt have a code editor. Now it does/it will. I'm fairly into llms but it took me awhile to try cursor because the cost of changing editors is very high. I'd probably eventually try a OpenAI editor but only if I saw it was actually getting adoption and good feedback from others. I'd also argue that while this llm powered editor space is pretty new, the editor space in general is much older.
pknerd 1y ago
hmm.. Tell me what AI wrapper do I make that you would acquire my product?
soorya3 1y ago
IMO, there are few solid reasons to purchasing this tool 1. windsurf has lot of insights into how developer writes code, style, problem etc 2. for the prompt engineering that went into generating the code 3. only microsoft and cursor has the moat so they need to compete at the applications level not model level. My prediction is anthropic, google or amazon will buy cursor. The next logical step to coding is building apps.
retornam 1y ago
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 like some of its fierce advocates say it would, wouldn't their potential customer base shrink? Professionals typically drive enterprise revenue, while hobbyists—who might become the primary users—generally don't support the same business model or spending levels. What am I missing here?
- lolinder 1y ago
  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.
  - mdasen 1y ago
    The article also doesn't say that it's $3B in cash that OpenAI is spending. They might be giving Windsurf $3B worth of OpenAI shares - paying an inflated value for Windsurf with their own inflated value. OpenAI just had a fundraising round that put them at $300B. Maybe they're just giving Windsurf 1% of OpenAI. Maybe they're even giving less than 1% - if OpenAI was worth $300B at the end of March and $150B last October, maybe they're worth $400B now. Maybe Windsurf is getting 0.75% of OpenAI that's "valued" at $3B.
    - jofzar 1y ago
      > OpenAI just had a fundraising round that put them at $300B. Maybe they're just giving Windsurf 1% of OpenAI That is the most hilarious maths I have ever seen, if this is true then it's maybe the biggest "holy fuck it's a bubble all the way down" I have ever seen
mirekrusin 1y ago
I don't get it. With $3bn budget you can replicate it in few months, promote for free using your own stronger brand and you're left with roughly $3bn in the bank to do whatever you want.
- n_ary 1y ago
  Your sentiment is very common, which reminds me of those days where everyone claimed to be able to clone twitter/airbnb/dropbox/gmail/whatever over the weekend. The real value lies in a successful execution, Windsurf is live and already has brand popularity with revenue stream. When it gets acquired by a titan, the die hard fans(vibe coders) will gain new trust that the product is not going anywhere and instead has solid future(we don’t yet know if oAI plans to do Msft style acquire, extend, kill yet). Cumulatively, this actually increases the value. Also Windsurf already has established enterprise revenue, hence brand trust and experience is already there. In summary, an existing live and proven product is worth more any day over 100% uncertainty of building a sufficiently capable team to perfectly execute the same idea in specific deadline and also have the added burden of marketing, market penetration, user acquisition etc.
  - mirekrusin 1y ago
    Windsurf is not present in enterprise. Github copilot, vscode and apis through azure - basically everything through Microsoft - is. Alternative to Microsoft's monopoly in enterprise that exists is open source. Comparing this situation to twitter is more like if there was some chat api service, known more than twitter itself, that twitter is using/wrapping where other alternative clients exist, some with stronger popularity, some being open source.
  - unmole 1y ago
    > Windsurf is live and already has brand popularity with revenue stream OpenAI has a much bigger brand.
DrNosferatu 1y ago
They seem almost exactly the same as Cursor, but even using the exact same rules, Cursor gives much better results than Windsurf (which performs below viable for me) - my test case was a complex Python project.
dubeye 1y ago
the answer is always users and growth rate.
PGenesis 1y ago
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swyx 1y ago
my summary here https://news.smol.ai/issues/25-05-05-cursor-openai-windsurf https://news.smol.ai/issues/25-05-05-cursor-openai-windsurf
serverlessmania 1y ago
GitHub acquired for 7b, Windsurf a VScode fork + Agentic LLM… 3b$. I should be missing something.
- jsheard 1y ago
  > Windsurf a VScode fork + Agentic LLM… 3b$. They don't have their own LLMs either, they've glued a 3rd party editor to 3rd party models. That's some expensive glue.
  - TiredOfLife 1y ago
    They have their own autocomplete model.
    - jsheard 1y ago
      My bad, I was looking at the wrong thing. They use 3rd party models for chat but you're right, they rolled their own autocomplete model from scratch.
casey2 1y ago
Who are these people that give OpenAI all this money? Aren't Microsoft, SoftBank, Nvidia publicly traded? Don't they owe a fiduciary duty to their investors? I'm surprised it's legal to just hand over a blank check to random private companies to make nonsense purchases. This isn't going to end well. If I were any of these companies I would be suing OpenAI to try to get my money back. Thrive, ARK, Tiger and the others can pound sand
- anticensor 1y ago
  Long term investments exist.
ramoz 1y ago
Bearish on IDEs after using Claude Code.
qainsights 1y ago
Valuation lost its meaning in recent years :)
victorantos 1y ago
This is classic OpenAI - acquiring competitors rather than innovating internally. They're desperately trying to keep up with competition from Anthropic and Microsoft's GitHub, but throwing money at the problem is hardly a creative solution. What's especially rich is the timing - right after OpenAI backpedaled on their restructuring plans due to "public pushback" (read: Sam Altman making yet another governance blunder). Now they're dumping billions into a tool that's essentially the same thing everyone else is building.
franze 1y ago
here is the thing, even those editors are relict of the pasts, the code is still in the center in these editors. thats something we need now, but not in the near (2 years, 5 years, 10 years?) future. then the prompt is the coding, the reasoning is the execution, the code just an abstract layer that we do not care to much about i.e.: like assembly, machine instructions. we know it exists, bit even here on hackernews i would guess only a small fraction know how it really works on a detailed level. there will still be coding, instructions (prompt) -> execution (reasoning and AI code and code execution -> feedback (debugging to AI then and one point to the user) bur actual looking at the code, well, thats only when this cycle annoyingly fails. so current IDEs are still built from an code first mindset. this will not be the IDE of the future. so basically OpenAI bought a Dinosaur
yapyap 1y ago
damn. openai just seems to have a hole in their hand they keep temporarily patching up with new investor money
libraryofbabel 1y ago
But is there a secret sauce in any of the coding agents (Copilot Agent, Windsurf, Claude Code, Cursor, Cline, Aider, etc)? Sure, some have better user experience than others, but what if anything makes one "better at coding" than another? As this great blog post lays bare ("The Emperor Has No Clothes", https://ampcode.com/how-to-build-an-agent https://ampcode.com/how-to-build-an-agent), the core tech of a coding agent isn't anything magic - it's a set of LLM prompts plus a main loop running the calls to the LLM and executing the tool calls that the LLM wants to do. The tools are pretty standard like, search, read file, edit file, execute a bash command, etc. etc. Really all the power and complexity and "coding ability is in the LLM itself. Sure, it's a lot of work to make something polished that devs want to use - but is there any more to it than that? So what is the differentiator here, other than user experience (for which I prefer the CLI tools, but to each their own)? $3B is a lot for something that sure doesn't seem to have any secret sauce tech or moat that I can see.
- gregschlom 1y ago
  But one could have said the same thing of Whatsapp when they got acquired by Facebook, no? Just a messaging app, anyone can replicate.
  - libraryofbabel 1y ago
    Yes and no. A messaging app with 450m users has very strong network effects. Users are sticky in a way they aren’t going to be with a VS Code fork which will be increasingly incompatible with the VS Code ecosystem. There are a lot of equally good alternatives to Windsurf and you don’t have to persuade all your friends and relatives to switch too.
- hello_newman 1y ago
  The moat is Windsurf’s custom LLM and the ops around it (training pipelines, fine-tuning, infra). Codeium (Windsurf’s parent) started as a GPU optimization company, so they have deep expertise there. Unlike most agents that might just wrap OpenAI/Claude/etc Windsurf’s own model powers its code edits, not external API calls. That’s where the defensibility is. better in-house models + efficient infra = stronger long-term moat
MR4D 1y ago
Here’s the crazy thing. All MSFT has to do is build in connections to every AI provider for VS Code and they win. Embrace & Extend will never die.
- alganet 1y ago
  > Embrace & Extend will never die Spread too thin is often the final result of embrace and expand.
waynesonfire 1y ago
> 1,000 prompt credits/user/month "hey Jim, can I use your credits? I have a deadline and I'm all out."
djha-skin 1y ago
As a Vimmer, I'm not into VS Code forks. I really like the goose CLI[1] though. Some untapped market potential right there. 1: https://GitHub.com/block/goose https://GitHub.com/block/goose
- jsbg 1y ago
  all IDEs have vim plugins
  - djha-skin 1y ago
    Vim has IDE plugins. Terminal life forever
thekhatribharat 1y ago
Valuation aside, Windsurf has built its own models [1] and boasts enviable enterprise distribution: $100M ARR, per TechCrunch [2] [1] https://windsurf.com/blog/our-model-strategy https://windsurf.com/blog/our-model-strategy [2] https://techcrunch.com/2025/04/22/why-openai-wanted-to-buy-cursor-but-opted-for-the-fast-growing-windsur https://techcrunch.com/2025/04/22/why-openai-wanted-to-buy-c...
nsoonhui 1y ago
However crazy the 3 billion valuation is, windsurf's valuation is still very sane compared to that of Safe Super intelligence, who exists for less than a year, with no product, no roadmap,and virtually no hype, but is worth at 30 billion.
manicennui 1y ago
So which of OpenAI's investors are also Windsurf investors?
dankwizard 1y ago
What's funny is the translation layer between your prompt <--> agent <--> LLM, that code was written by ChatGPT. So OpenAI are paying for software which leverages other LLMs written by their own LLM. We live in a topsy turvy world.
habosa 1y ago
Maybe I'm missing something but I don't see many comments here talking about how this is a competitive move by OpenAI against Anthropic? From what I've heard most people using/liking these agentic IDEs are using Claude models to power them, they seem to be the best at writing code. By buying Windsurf (and trying to buy Cursor) OpenAI can figure out why Claude is better at this task, fix GPT, and then make GPT the default for the coding use case. Not sure it's worth $3B, but that's also not a lot to them when they can raise unlimited money at any time,
CSMastermind 1y ago
People seem to be pretty negative about this but of all the AI dev tools I've evaluated it's the only one that's felt meaningfully better than just using the web interfaces of the various frontier models. I don't think it's good value for the money but pretending it's just a VSCode fork that wraps LLMs is underselling it. There's something they're doing that makes them better than Cursor, Claude Code, etc.
sagitta_on_hn 1y ago
I like Windsurf for RSE, but it sometimes gets a little too excited which can take me out of the flow to undo stuff and get back into the groove of things. The Claude integration is quite nice - I hope that doesn't take a step backward with the acquisition.
koenigvonamburu 1y ago
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SwtCyber 1y ago
Feels like OpenAI is trying to double down on control and narrative at the same time
robertlagrant 1y ago
I'd love it if windsurf were a single private Gist that is the prompt for OpenAI, and a load of people building UIs around it.
Lirael 1y ago
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lovelysoni03 1y ago
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lovelysoni03 1y ago
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Alex_001 1y ago
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spilldahill 1y ago
Big move by OpenAI—curious how Windsurf fits into the long game.
Calliope1 1y ago
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neil5paul 1y ago
I think it's more of a time saver move by openAI - they can probably build something similar, cheaper – but, windsurf has established itself. Looking forward to see where this goes
lgiordano_notte 1y ago
Value isn’t just the editor, it’s the workflow. Letting LLMs plan and act across multi-step flows is a hard problem, and Windsurf figured out a dev-focused version of that. Gains to be made in browser automation once you add structure, retries, and context. Feels like a bet on that pattern becoming default. But yeah as others said, highly doubt that's $3B in hard cash, more likely a roll-up of shares etc.
hakube 1y ago
looks like VSCode
Havoc 1y ago
Very strange move. They already have the models and their partner MS is providing the base editor. So they’re paying 3bn for the integration and clients basically? Seems pricey
- lanthissa 1y ago
  they're paying to aquire places where you can sell tokens at a markup, because the future is multiple base models that are good enough for most user tasks where user gateways play the base model providers off each other and capture a lot of the value
m3kw9 1y ago
I use ChatGPT’s “work with” code helper and one of my biggest uses on ChatGPT. It’s a good first line before I pull out the big guns(APIs). Sadly the code canvas is rarely as it’s geared mostly for single page web app functionality useless demo tests. Maybe this is where Windsurf can come in
itsmeadarsh 1y ago
Weren't they also in Cursor too?
99nala 1y ago
This feels absurd. When money clearly isn't an issue.
koenvaneijk 1y ago
i fail to understand what makes this $3B valuation justified. i built my personal code assistant after using cursor/windsurf/aider/cline because i was frustrated with how crappy they worked for my use case. i only program in python/js/html/css and i needed something better. only took me an hour of prompting and after that tinycoder basically built itself from there on out. i still use vscode to inspect the code sometimes, but i might replace vscode ultimately too. source code at https://github.com/koenvaneijk/tinycoder https://github.com/koenvaneijk/tinycoder and contributions welcome obviously.
- motoboi 1y ago
  If you think about it, facebook is just a ui over a database. Google is just a html form for a list of pages and hacker news can be replicated with a Microsoft Access. If that seems stupid, is because it is. There are network effects and small UI benefits.
  - koenvaneijk 1y ago
    yes but at least google provides excellent search results, facebook has all my friends and hacker news has well.. the latest news :-)
JCharante 1y ago
I've never heard of Windsurf before. I use Cursor daily however.
- animitronix 1y ago
  It used to be called Codeium. Their TOS are insane...
guluarte 1y ago
why AI needs a text editor?
animitronix 1y ago
Pretty stupid move with Microsoft moving to put the kibosh on all of these proprietary vscode forks. Could be worth almost nothing in a matter of months...
dotemacs 1y ago
Has anybody actually used Windsurf's Emacs mode? You'd think that with a generative AI coding editor, they'd stay on top of it and make it work. But I guess that wasn't the case up until now. Maybe with this acquisition that might change...
pabna 1y ago
damn i almost worked at this company in 2024.
mtnGoat 1y ago
I think this is way over priced, could they not build their own with significantly less resource outlay? But I guess I’m not really the guy that buys billion dollar things, so I probably don’t know how to evaluate them.
phupt26 1y ago
OpenAI is turning to Profit Mode. Reference: https://newscvg.com/coverage/business-economy/openai-maintains-nonprofit-control-amid-structural-transition-CW2O4MY2U https://newscvg.com/coverage/business-economy/openai-maintai...
jamietanna 1y ago
Podcast interview with the CEO of Windsurf talking about the tech behind it https://newsletter.pragmaticengineer.com/p/building-windsurf-with-varun-mohan https://newsletter.pragmaticengineer.com/p/building-windsurf...
replwoacause 1y ago
Cline is much better IMO
mikestaub 1y ago
Seems like a way to justify stock valuations of OpenAI while picking up some good talent to go after vertical stack as the foundation models become commodified. Smart play.

667 points by swyx 1y ago

sidcool 1y ago

Now their models may have limits on how VS code and Cursor use it. Competition heating up!

throwaway984393 1y ago

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dtagames 1y ago

https://archive.ph/ocXFo https://archive.ph/ocXFo

jeanlucas 1y ago

oh wow, meaning I won't need to pay for Windsurf? What do you think will be the monetization path for this?

deleted 1y ago
[deleted]
nialse 1y ago
Probably the other way around. Windsurf and co (Aider, Cursor) drives a heap of traffic to their API from which OpenAI actually profit. They just need to have their own tool to lock customers in their ecosystem.

bionhoward 1y ago

Dumb, fail for user freedom, nothing owned by OpenAI can be used to … create AI or anything that competes with them: scheduled AI, AI agents, AI tools, AI coding, chat, audio, image gen, video gen, shopping, and oh, anything the AI can do, soon social networking and hardware, what’s left that doesn’t compete with these assholes? ChatGPT is a great breakthrough but it’s wasted if everyone has to worry about a noncompete with it. Seriously, how is it not insane to think we should outsource our thoughts and agree never to use the thoughts to compete with the thinker? Who wants to live in a world where nobody thinks and nobody can make anything competitive with their “Saviour Machine?” Anybody who would join an org like that for a few billion dollars is a sell out. It’s an AI safety nightmare, too. I’m just flabbergasted millions of noobs accept not to compete with intelligence, wtf is this world, if you can’t use your thoughts to compete with your thinker, what is left for you? lol this is worse than black mirror

frabcus 1y ago
Where's this non-compete clause? In ChatGPT T&Cs?

deleted 1y ago

[deleted]

bartimus 1y ago

They didn't even buy an IDE since windsurf is more like a VS code plugin. So what was it exactly that was worth the 3B that they couldn't replicate themselves? Their prompts? Their training sets? Their users or user data?

thomasfromcdnjs 1y ago
I'd guess the prompts and employees. I've found Windsurf more reliable/efficient than any other editors by leagues. How ever they have named the tools, crafted their prompts and generally how their internals reason is just on the money. I don't think that is easy to replicate, iterating on prompts over product releases whilst not pissing off your user base constantly is a feat in of itself.
- bartimus 1y ago
  Then perhaps it's about bringing in the human talent that wrote those prompts.
XCSme 1y ago
To be honest, Windsurf doesn't work like half of the time, so it's more likely their users, the data, and their branding/marketing potential.
TiredOfLife 1y ago
Windsurf/Codeium plugin is at least 3 years old.
patapong 1y ago
Maybe time? OpenAI has access to basically infinite capital right now, if they believe this will be an importnat market and they could save a few months on launching this acquisition may be worth it for them.

KhazAkar 1y ago

Pure speculation without official voice.

infecto 1y ago

Windsurf probably sees this as a win. I still think they're behind in some areas, Cursor's Agent feels faster and more responsive but Windsurf nails the rest. The documentation is far better, and the overall developer experience is more solid. Cursor still feels like a hacked-on plug-in in a broken VS Code fork. Even small touches, like built-in Linux install instructions, show Windsurf's polish.

h8hawk 1y ago
In my experience, Windsurf was significantly more effective when working with a big codebase.
- whywhywhywhy 1y ago
  Windsurf goes looking into the codebase and learning context before attacking the problem in my experience. Often Cursor tries it's best to just guess the solution without context and only really resorts to going deeper when you tell it they fails. I find if I tell Windsurf to look at something it will, Cursor I sometimes lay everything out for it and it just doesn't even read it. Ultimately though once you run out of requests on Windsurf it's very weak without Claude though, and the top up requests are burnt through too quickly.
  - pbowyer 1y ago
    I trialled Cursor for a month and then Windsurf. Cursor read entire code files in while Windsurf would read the first 100 lines (or was it 50?), then the next 100, and often stop before it got to the part of the file with the method in which was needed. So I went back to Cursor.
    - whywhywhywhy 1y ago
      Think how inconsistent this all is becomes one of the most frustrating parts of it.
- knes 1y ago

crimsonnoodle58 1y ago

$3B for a fork of an IDE which Microsoft keeps crippling by the day by making it's best extensions not work with forks (eg. C++, Python, C#, Remote SSH, etc)..

deleted 1y ago
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sidcool 1y ago
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
- avisser 1y ago
  > And it has a brand Didn't they change names months ago? I know them as Codeium.
  - levzzz 1y ago
    [dead]
- codyvoda 1y ago
  given that they lose >$4B/year I guess everything is peanuts
  - mrweasel 1y ago
    OpenAI have $40 billion in funding from SoftBank for the next two years, so they can afford to buy Windsurf. Is OpenAI worth the $260 billion valuation... No, of course not, they're losing >$4 billion a year.
    - dbbk 1y ago
      That $40 billion is actively being spent being lit on fire to serve all the ChatGPT requests though. It's not just sat in the bank doing nothing.

hotpepperishot 1y ago

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bix6 1y ago

~$40M ARR makes this a 75x Cursor yesterday was a 45X for comparison (9B, 200M) https://techcrunch.com/2025/04/16/openai-is-reportedly-in-talks-to-buy-windsurf-for-3b-with-news-expected-later-this-week/ https://techcrunch.com/2025/04/16/openai-is-reportedly-in-ta...

chipgap98 1y ago
Growth rate matters a lot though. If they are growing quickly that multiple reduces quickly
- lispisok 1y ago
  Easy to grow when you're selling one dollar bills for 75 cents
- bix6 1y ago
  You think they can double every year for the next 5 years?
airjason 1y ago
keep in mind a lot of $3B is ClosedAI paper money, so 75x ain't that ridiculous.
- bix6 1y ago
  Do you know the cash / equity split?
  - moralestapia 1y ago
    I do know that OpenAI doesn't have 3B in cash to just throw around. So, I'd be inclined to believe the vast majority of the deal is stock (or whatever that is called pre-IPO).
    - arrowleaf 1y ago
      Companies don't do these acquisitions with cash on hand. It's OpenAI and the whole pool of their creditors and investors.

Androider 1y ago

Windsurf and Cursor feel like temporary stopgaps, products of a narrow window in time before the landscape shifts again. Microsoft has clearly taken notice. They're already starting to lock down the upstream VSCode codebase, as seen with recent changes to the C/C++ extension [0]. It's not hard to imagine that future features like TypeScript 7.0 might be limited or even withheld from forks entirely. At the same time, Microsoft will likely replicate Windsurf and Cursor's features within a year. And deliver them with far greater stability and polish. Both Windsurf and Cursor are riddled with bugs that don't exist upstream, _especially_ in their AI assistant features beyond the VSCode core. Context management which is supposed to be the core featured added is itself incredibly poorly implemented [1]. Ultimately, the future isn't about a smarter editor, it's about a smarter teammate. Tools like GitHub Copilot or future agents will handle entire engineering tickets: generating PRs with tests, taking feedback, and iterating like a real collaborator. [0] https://www.theregister.com/2025/04/24/microsoft_vs_code_subtracts_cc_extension/ https://www.theregister.com/2025/04/24/microsoft_vs_code_sub... [1] https://www.reddit.com/r/cursor/comments/1kbt790/rules_in_496_major_issues_uncovered/ https://www.reddit.com/r/cursor/comments/1kbt790/rules_in_49...

onlyrealcuzzo 1y ago
> At the same time, Microsoft will likely replicate Windsurf and Cursor's features within a year. And deliver them with far greater stability and polish. We've seen this before with Office. We'll see it again.
- rvz 1y ago
  ...as done with Teams. Microsoft Build is this month [0] and it will tell where they are going next (other than price cuts). I'm expecting disappointment for now, but also expecting GitHub Copilot to be upgraded. Then we'll see if they are ahead or so far behind. [0] https://build.microsoft.com/en-US/home https://build.microsoft.com/en-US/home
  - rvz 1y ago
    Well well well: [0] [0] https://code.visualstudio.com/blogs/2025/05/19/openSourceAIEditor https://code.visualstudio.com/blogs/2025/05/19/openSourceAIE...

bko 1y ago

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 $1.3 billion valuation. > May 2025: $3 billion acquisition from OpenAI I wonder how much of the value is really from the model or the tooling around it. They all use the same models (mostly Claude, others have been horrible and buggy in my experience). Even co-pilot agent mode now uses Claude. The editor has their own LLM (?) that does the apply since LLMs often return snippets. They work well enough on Cursor. And then you have the auto-complete, which I think is their own model as well. But the main value from me is from the agent mode and 95% of the value is the underlying model. The other stuff could be more or less a VS Code plugin. The other benefit is the fixed pricing. I have no idea how much 500 calls cost if I were to use the API, but I expect they're probably losing money.

bfeynman 1y ago
talented and smart folks for sure but can't not notice how much luck it is especially because its like 100% just better models. Windsurf raised a ton of money and then said they pivoted which they had millions raised to just do something completely different that likely wouldn't have been easier to raise for. Even in an interview with the cursor founder he kind of dumbly rambles that they launched and then basically lost a ton of traction until GPT4 came out. They have some core features like autocomplete but I'm struggling to see vision other than getting training data for iterative dev is a partial moat compared to just seeing commits and final code bases.
- deleted 1y ago
  [deleted]
- sigmoid10 1y ago
  Training data is almost certainly their main reason for this acquisition. Users themselves and the models they use don't really matter. What matters is their interactions with the models. Especially if you're trying to build coding agents that will be marketed to companies for $10k a month. OpenAI is going for the industry B2B opportunity here, not consumers or end users.

seydor 1y ago

This may end up saving openAI. their models have no moat

blitzar 1y ago
The companies they are buying have even less moat than openAi

whazor 1y ago

From a customer point of view it makes sense to pay a fixed monthly price for both chat and coding, instead of having two separate subscriptions.

mark_l_watson 1y ago
Question: has there been any announcements of bundling Windsurf with the ChatGPT $20/month package? (I could not access the linked article)
mrweasel 1y ago
That makes a lot of sense, for the customers, but OpenAI is not profitable on even their $200 subscription. I doubt Windsurf is turning a profit either. Buying a "bundle" should result in a lower price, as compared to buying both tools separately, making the loses worse. Unless they can reuse some of the same infrastructure and save a lot of money that way.

rvz 1y ago

Very surprising outcome, since OpenAI went after Cursor (twice) [0] And I originally thought that Cursor would be bought instead a day before the rumour [1]. It was smart for Windsurf to take the offer and to get greedy in this hype cycle. Unless Cursor is thinking that Anthropic or someone else will buy them for a lot more, its going to get extremely competitive as the switching cost for Cursor is zero and that ARR can disappear very quickly. Copilot will attempt to destroy Cursor on price and functionality for however long they want to. Very risky for Cursor at $9B valuation (which I think is overvalued and based on VC FOMO). [0] https://techcrunch.com/2025/04/17/openai-pursued-cursor-maker-before-entering-into-talks-to-buy-windsurf-for-3b/ https://techcrunch.com/2025/04/17/openai-pursued-cursor-make... [1] https://news.ycombinator.com/item?id=43698819 https://news.ycombinator.com/item?id=43698819

returnInfinity 1y ago
sometimes products stick, like slack, dropbox, box cursor may survive
rvz 1y ago
*not get greedy.

neonate 1y ago

https://archive.md/l6n9H https://archive.md/l6n9H

brap 1y ago

Recent announcements from OpenAI seem to indicate they know they're losing the race

dr_dshiv 1y ago
You are referring to the nonprofit continuation? They have certainly lost the monopoly.

lolinder 1y ago

The next step for Cursor and Windsurf both is that they need to work together to provide an answer for what it means to be a VS Code fork in the new era where Microsoft is trying to strangle the forks. If they're not already they should be teaming up with each other and with the VSCodium team and with the Open VSX marketplace. Microsoft is an existential threat to their model here, but with the money they each have coming in they together have the opportunity to make the whole ecosystem better by building out viable infrastructure for all VS Code forks, if they can cooperate.

SwtCyber 1y ago
There's a real opportunity here to build a sustainable, open ecosystem for AI-powered dev tools - but it's going to require actual coordination, not just parallel efforts

xnx 1y ago

"$3B" should be in heavy quotes if this is paid in OpenAI shares.

singularity2001 1y ago
probably paid in pro accounts

KhazAkar 1y ago

[flagged]

tom_y 1y ago

Fortunately it is not the cursor. I am using the cursor and I don't want it to be sold.

releaslot 1y ago

[dead]

Oras 1y ago

Good for them, always rooting for startups who win. That said, I have tried Windsurf multiple times, and it wasn't a pleasant experience compared to Cursor, which I've been using for more than 6 months as a paid customer.

incorrecthorse 1y ago

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

mrweasel 1y ago
Why didn't they just use ChatGPT to build it? Weird.
- singularity2001 1y ago
  it would be only a few millions if they used cursor and Claude but their ego prevented it
- bayarearefugee 1y ago
  Sometimes it almost seems like the idea that LLMs are capable of instantly creating real, maintainable software is vastly overblown to inflate valuations...
  - lispisok 1y ago
    Somebody didnt read their daily PR article about how CEOs are replacing entire teams with a few "rockstars vibe coding with AI"
michelb 1y ago
They can, of course, but why would they waste time on it? They are buying a tool, talent, and a heap of paying enterprise customers. This is a steal.
- echelon 1y ago
  And they're probably buying it with equity, not cash.
- yoyohello13 1y ago
  According to the various CEO's saying AI give 100x speedup they could just have one dev whip it up in a weekend no?

xyst 1y ago

An _ide_ sold for $3B? VCs and other early investors got their 1000% ROI on this one.

cokeandpepsi 1y ago
[dead]

ujkhsjkdhf234 1y ago

I need someone to convince me this isn't one of the biggest waste of money on an acquisition. If OpenAI can't build an official IDE for less than 3 Billion then what are they even doing? Windsurf can't have that high of a userbase that you feel the need to pay for it.

ashish01 1y ago
> one of the biggest waste of money on an acquisition. I think that was when intel acquired McAfee for 8B in 2010.
- insane_dreamer 1y ago
  MSFT buying Nokia for $7B is runner up. But at least it could have worked if MSFT hadn't burned it down. Intel and McAfee makes no sense at all.
fazeirony 1y ago
you mean the company that spent $9B to make $4B in 2024? that openai? i agree with you on this - it seems that openai hallucinates reality as much as their products do :-/
singularity2001 1y ago
instinctively I agree but it's all about timing: if they try to build their own IDE and hired people it would probably still take a couple of years to get a decent product. I don't know about patents.
- mdaniel 1y ago
  > if they try to build their own IDE and hired people Oh, haven't you heard? Hiring people to write software is so last decade. Maybe they just didn't want to vibe code a Windsurf implementation and decided to buy a press cycle for $3B
JumpCrisscross 1y ago
We don’t know how OpenAI is paying. A lot of comments seem to be assuming this is an all-cash deal. We have no evidence for that.

resters 1y ago

- A $3B signal that OpenAI is unable to do product - AI assisted coding is mostly about managing the context and knowing what to put in the context to avoid confusion and dumb mistakes, it's not about the UI. - This signals that OpenAI believes that highly effective coding assistant LLMs will become a commodity / open source and so UI / tooling lock-in is a good investment.

herval 1y ago
chatgpt is massively popular, I'm not sure that's the signal I'd get they're acquiring one of the biggest the front doors to developers, with Windsurf - whether it'll _remain_ in fashion or not, that's a different debate. This can be like facebook acquiring instagram (if developers turn out to be the actual profit-driver niche for LLMs, which currently seems to be the case)
- resters 1y ago
  > developers turn out to be the actual profit-driver niche for LLMs AI is definitely huge for anyone writing code, though one can imagine a model like o3 completely replacing 90% of white collar jobs that involve reading, writing and analysis. Interestingly, o3 is particularly bad at legalese, likely not fully by accident. Of all professions whose professional organizations and regulatory capture create huge rents, the legal profession is the most ripe for disruption. It's not uncommon for lawyers to bill $250 to $500 per hour for producing boilerplate language. Contracts reviewed or drawn up by lawyers never come with any guarantees either, so one does not learn until too late that the lawyer overlooked something important. Most lawyers have above average IQs and understand arcane things, but most of it is pretty basic at its core. Lawyers, Pharmacists, many doctors, nearly all accountants, and most middle managers will be replaceable by AI agents. Software engineers are still expected to produce novel outputs unlike those other fields, so there is still room for humans to pilot the machine for a while. And since most software is meant to be used by humans, soon software will need to be usable by AI agents, which will reduce a lot of UI to an MCP.
  - noitpmeder 1y ago

JSR_FDED 1y ago

What’s the equivalent in the Vim world?

TiredOfLife 1y ago
https://windsurf.com/vim_tutorial?extensionName=vim https://windsurf.com/vim_tutorial?extensionName=vim

owendarko 1y ago

We're reaching a point where we don't need to switch to another IDE (from VS Code/IntelliJ/insert-your-IDE-here) for "AI/vibe coding" IDEs can support "AI coding agents" on their own. The entire workflow for "AI coding agents" boils down to: 1. You write a prompt 2. The "agent" wraps it in a system prompt and sends it to the LLM 3. The LLM sends back a response 4. The agent performs specific actions based on that response (editing files, creating new ones, etc.) Microsoft already started doing that with Copilot. And they have a vibrant ecosystem of VS Code extensions (I maintain one of them [1]) "AI agents" should be a feature, not a separate piece of software (IDE) that's integral to software devs. [1] https://github.com/Kilo-Org/kilocode https://github.com/Kilo-Org/kilocode

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remoroid 1y ago

Windsurf is terrible, I always use AI just in a normal website and I tried this product a few days ago and it asks me if it can run a command to make a file, which I find extremely strange, then it fails to write valid commands even to do mkdir.

visarga 1y ago
It worked allright for me when I was using it, a month ago. I cancelled because they somhow lost my paid credits and refused to refund me. No matter how great an AI tool, if the company is mismanaging user payments or usage tracking, it is useless.
andai 1y ago
That was my experience with OpenAI's Codex auto-coder thing (running o4-mini). It took 5 minutes and like 200 commands to do what Gemini 2.5 Flash (not even Pro!) did in about 30 seconds. I see LLMs trying to do stuff that doesn't work in every AI coding thing I've tried, despite 20 pages of system prompts! (Or perhaps because of it.)

robertclaus 1y ago

A lot of this valuation must be aqui-hire and existing users, right? 6 months of development lead time can't be worth this much... can it?

istjohn 1y ago

I wonder how much of this is a data play for OpenAI as they work to improve language model performance on longer time horizons.

deleted 1y ago

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fcanesin 1y ago

OpenAI knows that everyday someone uses Gemini their ChatGPT brand dies a bit faster. Wonder what Google has in storage for I/O now in May, would be a death sentence to just steamroll with Gemini-3.

ukuina 1y ago
So soon after Gemini 2.5?
xnx 1y ago
> Wonder what Google has in storage for I/O now in May "Gemini 2.5 Pro Preview (I/O edition)" https://news.ycombinator.com/item?id=43906018 https://news.ycombinator.com/item?id=43906018
- fcanesin 1y ago
  LMAO, like one hour after. And guess what, it is a coding upgrade .
qoez 1y ago
Google IO in may? Guess we'll be getting a huge OpenAI release May 19th then. Edit: Oh of course, it's the open weights model they've been teasing.
andai 1y ago
They launched a new version of Gemini 2.5 Pro today. https://developers.googleblog.com/en/gemini-2-5-pro-io-improved-coding-performance/ https://developers.googleblog.com/en/gemini-2-5-pro-io-impro...
casey2 1y ago
Open AI needed to spend $3B pivoting away from bigdata based AI. But instead they went for the most shorted sighted move possible of snapping up the "trendiest" company nobody has ever heard outside the Ycombinator echo chamber. Typical VI-fallacy BS. If LLMs were actually good they would replace IDEs completely not be integrated.

ashvardanian 1y ago

If I recall correctly from the recent YC interview, the Windsurf founder noted their team leans more toward GTM than engineering. That makes this less likely to be a classic acquihire (as with Rockset) and more plausibly a data play rather than a product integration. My current read is that this is a frontier lab acquiring large-scale training data—cheaply—from a community of “vibe coders”, instead of paying professional annotators. In that light, it feels more like a “you are the product” scenario, which likely won’t sit well with Windsurf’s paying customers. Interesting times.

simple10 1y ago
Agreed. It seems like a data play and a hedge to beef up vibe code competition against upcoming Google and MS models so OpenAI doesn't lose API revenue. I would assume vibe coding consumes more tokens than most other text based API usage.

bradley13 1y ago

M&A activity needs much more strongly regulated. Buying up potential competitors is how we get monstrosities like Microsoft and Alphabet.

chipgap98 1y ago
In what world is Windsurf an OpenAI competitor?

throwaway7783 1y ago

This is probably a response to Claude Code, which is still experimental and terminal-only. In my experience Claude Code is fantastic, both for answering questions about the codebase and coding.

ccheney 1y ago
OpenAI has Codex CLI https://github.com/openai/codex https://github.com/openai/codex

knes 1y ago

does that mean that Windsurf will only support OpenAI models going forward? I doubt OpenAI will pay to have users use Gemini/Claude? Especially as all of these Ai coding tools (Windsurf, Augment, Cursor) are heavily subsidizing the users. I wonder what Anthropic makes of this. Windsurf was like a top 3 customers of them, might be a big revenue blow too?

ukuina 1y ago
Maybe Anthropic will buy Cursor to level the field.
owebmaster 1y ago
The queries made to other models is the juice of the data they will have access.

animanoir 1y ago

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_pdp_ 1y ago

I cannot pretend that I know what is going on - I don't. I think the long-term play here is something to do with Agents and they are simply cornering the market because coding tools are part to it. That being said, quick search around what people are building with these VIDEs reveals mostly landing pages that are actually not even that good. For the amount of money spent one could have easily bought a good template or pay someone to customise an existing one. I don't know. Maybe I am dumb.

redbell 1y ago

Ok, now I have a question: Will OpenAI keep Windsurf open to third-party models, or will they limit it to their own models only?

sidgarimella 1y ago

probably a rare area I fully agree with HN on– the IP here seems weak and it's not hard to swap out code editors, nothing like tearing out Salesforce or other sales-driven tooling. and idk if first mover advantage actually means much in the next 10 years given how dynamic the underlying models are. but undeniably these cos are all a great lesson in just how much cash lies in executing first/near first

dbreunig 1y ago

What is Windsurf's (or for that matter: Cursor, Cline, or CoPilot) moat? This seems like a great deal and timing for them.

D4ckard 1y ago

I don't get why people want the AI right in their editor. In another windows inside the editor, fine, but not inline with code I'm writing. It's super distracting to have AI auto complete pop up at random all the time. As always, typing speed, or speed at generating raw code, is not the bottleneck in programming. The crux remains design, in which case having the LLM on the side is just fine (if you use it for that). There are some niceties about inline completion (like spelling out a log message that's obvious from the surrounding code) but I don't get the hype much beyond that. Maybe I'm missing some feature though ...

echelon 1y ago
Have you tried it recently? AI autocomplete is the best thing I've experienced in developer experience in my career since git won over subversion. I don't use LLM code prompting, but autocomplete is my jam. It's getting things right 90% of the time when I'm plumbing fields or refactoring. It makes life so much more pleasurable, and I say that as someone who is already using a statically typed language with robust IDE refactoring capabilities. It's absolutely made me more productive.
- pknerd 1y ago
  I am happy with Copilot with VSCode..I do not think so, I would need to let AI generate the entire code. Even if I need, I copy/paste from Claude/GPT
tomjen3 1y ago
If you have tried the completions in copilot, you are right. They are complete garbage. Windsurfs on the other hand are much better. The only issue is that windsurf is super aggressive about them, but it is able to do do things like "the user made a change on this line, he most likely also want to make the change here".

sensanaty 1y ago

You'd think with all these super hyper advanced AI tools they're shitting out they would be able to make a mediocre VSCode extension of their own instead of flushing 3B down the drain. Guess that's slightly out of reach of their "AGI"s though.

crsv 1y ago

Man why did these guys do that OpenAI couldn’t replicate for less than 3Bn on reasonable timeline? This seems insane.

lnenad 1y ago
They've got users (which I don't doubt that OpenAI's fork of VSC would have as well but I assume that's their thought process)
- AlwaysRock 1y ago
  Yup. Even a small market share is market share. Plus they are paying to acquire a team of folks who are already in this space and who will, until golden handcuffs come off, keep working in this space. Still an insane number though.
  - mirekrusin 1y ago
    But openai is stronger brand with free publicity - whatever they say/do will instantly show up the same day on all news across the world. The "space" exists for months, there are no people with 10y expertise here, with their brand they can attract any talent they can wish for in this "space", no? You can probably vibe code 80% of it in a week or two?
    - owebmaster 1y ago
      > You can probably vibe code 80% of it in a week or two? Apparently, no. And the low quality of all OpenAI apps is proof of that.
    - AlwaysRock 1y ago
      I guess it's all up to interpretation, but having a brand in one space doesn't necessarily translate to a brand in another. OpenAI doesnt/didnt have a code editor. Now it does/it will. I'm fairly into llms but it took me awhile to try cursor because the cost of changing editors is very high. I'd probably eventually try a OpenAI editor but only if I saw it was actually getting adoption and good feedback from others. I'd also argue that while this llm powered editor space is pretty new, the editor space in general is much older.

pknerd 1y ago

hmm.. Tell me what AI wrapper do I make that you would acquire my product?

soorya3 1y ago

IMO, there are few solid reasons to purchasing this tool 1. windsurf has lot of insights into how developer writes code, style, problem etc 2. for the prompt engineering that went into generating the code 3. only microsoft and cursor has the moat so they need to compete at the applications level not model level. My prediction is anthropic, google or amazon will buy cursor. The next logical step to coding is building apps.

retornam 1y ago

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 like some of its fierce advocates say it would, wouldn't their potential customer base shrink? Professionals typically drive enterprise revenue, while hobbyists—who might become the primary users—generally don't support the same business model or spending levels. What am I missing here?

lolinder 1y ago
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.
- mdasen 1y ago
  The article also doesn't say that it's $3B in cash that OpenAI is spending. They might be giving Windsurf $3B worth of OpenAI shares - paying an inflated value for Windsurf with their own inflated value. OpenAI just had a fundraising round that put them at $300B. Maybe they're just giving Windsurf 1% of OpenAI. Maybe they're even giving less than 1% - if OpenAI was worth $300B at the end of March and $150B last October, maybe they're worth $400B now. Maybe Windsurf is getting 0.75% of OpenAI that's "valued" at $3B.
  - jofzar 1y ago
    > OpenAI just had a fundraising round that put them at $300B. Maybe they're just giving Windsurf 1% of OpenAI That is the most hilarious maths I have ever seen, if this is true then it's maybe the biggest "holy fuck it's a bubble all the way down" I have ever seen

mirekrusin 1y ago

I don't get it. With $3bn budget you can replicate it in few months, promote for free using your own stronger brand and you're left with roughly $3bn in the bank to do whatever you want.

n_ary 1y ago
Your sentiment is very common, which reminds me of those days where everyone claimed to be able to clone twitter/airbnb/dropbox/gmail/whatever over the weekend. The real value lies in a successful execution, Windsurf is live and already has brand popularity with revenue stream. When it gets acquired by a titan, the die hard fans(vibe coders) will gain new trust that the product is not going anywhere and instead has solid future(we don’t yet know if oAI plans to do Msft style acquire, extend, kill yet). Cumulatively, this actually increases the value. Also Windsurf already has established enterprise revenue, hence brand trust and experience is already there. In summary, an existing live and proven product is worth more any day over 100% uncertainty of building a sufficiently capable team to perfectly execute the same idea in specific deadline and also have the added burden of marketing, market penetration, user acquisition etc.
- mirekrusin 1y ago
  Windsurf is not present in enterprise. Github copilot, vscode and apis through azure - basically everything through Microsoft - is. Alternative to Microsoft's monopoly in enterprise that exists is open source. Comparing this situation to twitter is more like if there was some chat api service, known more than twitter itself, that twitter is using/wrapping where other alternative clients exist, some with stronger popularity, some being open source.
- unmole 1y ago
  > Windsurf is live and already has brand popularity with revenue stream OpenAI has a much bigger brand.

DrNosferatu 1y ago

They seem almost exactly the same as Cursor, but even using the exact same rules, Cursor gives much better results than Windsurf (which performs below viable for me) - my test case was a complex Python project.

dubeye 1y ago

the answer is always users and growth rate.

PGenesis 1y ago

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swyx 1y ago

my summary here https://news.smol.ai/issues/25-05-05-cursor-openai-windsurf https://news.smol.ai/issues/25-05-05-cursor-openai-windsurf

serverlessmania 1y ago

GitHub acquired for 7b, Windsurf a VScode fork + Agentic LLM… 3b$. I should be missing something.

jsheard 1y ago
> Windsurf a VScode fork + Agentic LLM… 3b$. They don't have their own LLMs either, they've glued a 3rd party editor to 3rd party models. That's some expensive glue.
- TiredOfLife 1y ago
  They have their own autocomplete model.
  - jsheard 1y ago
    My bad, I was looking at the wrong thing. They use 3rd party models for chat but you're right, they rolled their own autocomplete model from scratch.

casey2 1y ago

Who are these people that give OpenAI all this money? Aren't Microsoft, SoftBank, Nvidia publicly traded? Don't they owe a fiduciary duty to their investors? I'm surprised it's legal to just hand over a blank check to random private companies to make nonsense purchases. This isn't going to end well. If I were any of these companies I would be suing OpenAI to try to get my money back. Thrive, ARK, Tiger and the others can pound sand

anticensor 1y ago
Long term investments exist.

ramoz 1y ago

Bearish on IDEs after using Claude Code.

qainsights 1y ago

Valuation lost its meaning in recent years :)

victorantos 1y ago

This is classic OpenAI - acquiring competitors rather than innovating internally. They're desperately trying to keep up with competition from Anthropic and Microsoft's GitHub, but throwing money at the problem is hardly a creative solution. What's especially rich is the timing - right after OpenAI backpedaled on their restructuring plans due to "public pushback" (read: Sam Altman making yet another governance blunder). Now they're dumping billions into a tool that's essentially the same thing everyone else is building.

franze 1y ago

here is the thing, even those editors are relict of the pasts, the code is still in the center in these editors. thats something we need now, but not in the near (2 years, 5 years, 10 years?) future. then the prompt is the coding, the reasoning is the execution, the code just an abstract layer that we do not care to much about i.e.: like assembly, machine instructions. we know it exists, bit even here on hackernews i would guess only a small fraction know how it really works on a detailed level. there will still be coding, instructions (prompt) -> execution (reasoning and AI code and code execution -> feedback (debugging to AI then and one point to the user) bur actual looking at the code, well, thats only when this cycle annoyingly fails. so current IDEs are still built from an code first mindset. this will not be the IDE of the future. so basically OpenAI bought a Dinosaur

yapyap 1y ago

damn. openai just seems to have a hole in their hand they keep temporarily patching up with new investor money

libraryofbabel 1y ago

But is there a secret sauce in any of the coding agents (Copilot Agent, Windsurf, Claude Code, Cursor, Cline, Aider, etc)? Sure, some have better user experience than others, but what if anything makes one "better at coding" than another? As this great blog post lays bare ("The Emperor Has No Clothes", https://ampcode.com/how-to-build-an-agent https://ampcode.com/how-to-build-an-agent), the core tech of a coding agent isn't anything magic - it's a set of LLM prompts plus a main loop running the calls to the LLM and executing the tool calls that the LLM wants to do. The tools are pretty standard like, search, read file, edit file, execute a bash command, etc. etc. Really all the power and complexity and "coding ability is in the LLM itself. Sure, it's a lot of work to make something polished that devs want to use - but is there any more to it than that? So what is the differentiator here, other than user experience (for which I prefer the CLI tools, but to each their own)? $3B is a lot for something that sure doesn't seem to have any secret sauce tech or moat that I can see.

gregschlom 1y ago
But one could have said the same thing of Whatsapp when they got acquired by Facebook, no? Just a messaging app, anyone can replicate.
- libraryofbabel 1y ago
  Yes and no. A messaging app with 450m users has very strong network effects. Users are sticky in a way they aren’t going to be with a VS Code fork which will be increasingly incompatible with the VS Code ecosystem. There are a lot of equally good alternatives to Windsurf and you don’t have to persuade all your friends and relatives to switch too.
hello_newman 1y ago
The moat is Windsurf’s custom LLM and the ops around it (training pipelines, fine-tuning, infra). Codeium (Windsurf’s parent) started as a GPU optimization company, so they have deep expertise there. Unlike most agents that might just wrap OpenAI/Claude/etc Windsurf’s own model powers its code edits, not external API calls. That’s where the defensibility is. better in-house models + efficient infra = stronger long-term moat

MR4D 1y ago

Here’s the crazy thing. All MSFT has to do is build in connections to every AI provider for VS Code and they win. Embrace & Extend will never die.

alganet 1y ago
> Embrace & Extend will never die Spread too thin is often the final result of embrace and expand.

waynesonfire 1y ago

> 1,000 prompt credits/user/month "hey Jim, can I use your credits? I have a deadline and I'm all out."

djha-skin 1y ago

As a Vimmer, I'm not into VS Code forks. I really like the goose CLI[1] though. Some untapped market potential right there. 1: https://GitHub.com/block/goose https://GitHub.com/block/goose

jsbg 1y ago
all IDEs have vim plugins
- djha-skin 1y ago
  Vim has IDE plugins. Terminal life forever

thekhatribharat 1y ago

Valuation aside, Windsurf has built its own models [1] and boasts enviable enterprise distribution: $100M ARR, per TechCrunch [2] [1] https://windsurf.com/blog/our-model-strategy https://windsurf.com/blog/our-model-strategy [2] https://techcrunch.com/2025/04/22/why-openai-wanted-to-buy-cursor-but-opted-for-the-fast-growing-windsur https://techcrunch.com/2025/04/22/why-openai-wanted-to-buy-c...

nsoonhui 1y ago

However crazy the 3 billion valuation is, windsurf's valuation is still very sane compared to that of Safe Super intelligence, who exists for less than a year, with no product, no roadmap,and virtually no hype, but is worth at 30 billion.

manicennui 1y ago

So which of OpenAI's investors are also Windsurf investors?

dankwizard 1y ago

What's funny is the translation layer between your prompt <--> agent <--> LLM, that code was written by ChatGPT. So OpenAI are paying for software which leverages other LLMs written by their own LLM. We live in a topsy turvy world.

habosa 1y ago

Maybe I'm missing something but I don't see many comments here talking about how this is a competitive move by OpenAI against Anthropic? From what I've heard most people using/liking these agentic IDEs are using Claude models to power them, they seem to be the best at writing code. By buying Windsurf (and trying to buy Cursor) OpenAI can figure out why Claude is better at this task, fix GPT, and then make GPT the default for the coding use case. Not sure it's worth $3B, but that's also not a lot to them when they can raise unlimited money at any time,

CSMastermind 1y ago

People seem to be pretty negative about this but of all the AI dev tools I've evaluated it's the only one that's felt meaningfully better than just using the web interfaces of the various frontier models. I don't think it's good value for the money but pretending it's just a VSCode fork that wraps LLMs is underselling it. There's something they're doing that makes them better than Cursor, Claude Code, etc.

sagitta_on_hn 1y ago

I like Windsurf for RSE, but it sometimes gets a little too excited which can take me out of the flow to undo stuff and get back into the groove of things. The Claude integration is quite nice - I hope that doesn't take a step backward with the acquisition.

koenigvonamburu 1y ago

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SwtCyber 1y ago

Feels like OpenAI is trying to double down on control and narrative at the same time

robertlagrant 1y ago

I'd love it if windsurf were a single private Gist that is the prompt for OpenAI, and a load of people building UIs around it.

Lirael 1y ago

[flagged]

lovelysoni03 1y ago

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lovelysoni03 1y ago

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Alex_001 1y ago

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spilldahill 1y ago

Big move by OpenAI—curious how Windsurf fits into the long game.

Calliope1 1y ago

[flagged]

neil5paul 1y ago

I think it's more of a time saver move by openAI - they can probably build something similar, cheaper – but, windsurf has established itself. Looking forward to see where this goes

lgiordano_notte 1y ago

Value isn’t just the editor, it’s the workflow. Letting LLMs plan and act across multi-step flows is a hard problem, and Windsurf figured out a dev-focused version of that. Gains to be made in browser automation once you add structure, retries, and context. Feels like a bet on that pattern becoming default. But yeah as others said, highly doubt that's $3B in hard cash, more likely a roll-up of shares etc.

hakube 1y ago

looks like VSCode

Havoc 1y ago

Very strange move. They already have the models and their partner MS is providing the base editor. So they’re paying 3bn for the integration and clients basically? Seems pricey

lanthissa 1y ago
they're paying to aquire places where you can sell tokens at a markup, because the future is multiple base models that are good enough for most user tasks where user gateways play the base model providers off each other and capture a lot of the value

m3kw9 1y ago

I use ChatGPT’s “work with” code helper and one of my biggest uses on ChatGPT. It’s a good first line before I pull out the big guns(APIs). Sadly the code canvas is rarely as it’s geared mostly for single page web app functionality useless demo tests. Maybe this is where Windsurf can come in

itsmeadarsh 1y ago

Weren't they also in Cursor too?

99nala 1y ago

This feels absurd. When money clearly isn't an issue.

koenvaneijk 1y ago

i fail to understand what makes this $3B valuation justified. i built my personal code assistant after using cursor/windsurf/aider/cline because i was frustrated with how crappy they worked for my use case. i only program in python/js/html/css and i needed something better. only took me an hour of prompting and after that tinycoder basically built itself from there on out. i still use vscode to inspect the code sometimes, but i might replace vscode ultimately too. source code at https://github.com/koenvaneijk/tinycoder https://github.com/koenvaneijk/tinycoder and contributions welcome obviously.

motoboi 1y ago
If you think about it, facebook is just a ui over a database. Google is just a html form for a list of pages and hacker news can be replicated with a Microsoft Access. If that seems stupid, is because it is. There are network effects and small UI benefits.
- koenvaneijk 1y ago
  yes but at least google provides excellent search results, facebook has all my friends and hacker news has well.. the latest news :-)

JCharante 1y ago

I've never heard of Windsurf before. I use Cursor daily however.

animitronix 1y ago
It used to be called Codeium. Their TOS are insane...

guluarte 1y ago

why AI needs a text editor?

animitronix 1y ago

Pretty stupid move with Microsoft moving to put the kibosh on all of these proprietary vscode forks. Could be worth almost nothing in a matter of months...

dotemacs 1y ago

Has anybody actually used Windsurf's Emacs mode? You'd think that with a generative AI coding editor, they'd stay on top of it and make it work. But I guess that wasn't the case up until now. Maybe with this acquisition that might change...

pabna 1y ago

damn i almost worked at this company in 2024.

mtnGoat 1y ago

I think this is way over priced, could they not build their own with significantly less resource outlay? But I guess I’m not really the guy that buys billion dollar things, so I probably don’t know how to evaluate them.

phupt26 1y ago

OpenAI is turning to Profit Mode. Reference: https://newscvg.com/coverage/business-economy/openai-maintains-nonprofit-control-amid-structural-transition-CW2O4MY2U https://newscvg.com/coverage/business-economy/openai-maintai...

jamietanna 1y ago

Podcast interview with the CEO of Windsurf talking about the tech behind it https://newsletter.pragmaticengineer.com/p/building-windsurf-with-varun-mohan https://newsletter.pragmaticengineer.com/p/building-windsurf...

replwoacause 1y ago

Cline is much better IMO

mikestaub 1y ago

Seems like a way to justify stock valuations of OpenAI while picking up some good talent to go after vertical stack as the foundation models become commodified. Smart play.