OpenAI looked at buying Cursor creator before turning to Windsurf

An apt analogy, given...

"The company must change its mindset and become proactive in its approach to compliance. I have decided this can best be achieved by the imposition of a sanction that will serve as a deterrent to future non-compliant conduct by Star and other pub-owning businesses."

https://www.gov.uk/government/news/heineken-pub-company-fine...

Nice analogy. Although a simpler way to say it is simply vertical integration, a known term for the phenomenon with a whole class of benefits.

One of those benefits brings to mind another analogy: Apple. The ai model and the tooling are kind of like the hardware and software. By co-developing them you can make a better product and certainly something hard to compete with.

VS Code fork 'default model' is the new default search engine

This is exactly what I would do too if AGI was just around the corner.

On the few times I've used Cursor or Claude Code for tasks beyond simple tests or features, I found myself spending more time correcting their errors than if I had written the code from scratch.

I like Cursor and use it daily, but none of its models are even close to being able to take nontrivial work. Besides, it quickly gets expensive if you’re using the smarter models.

IMO these AI tools will become to software engineers what CAD is to mechanical and civil engineers. Can they work without it? Sure, but why would they?

I use cursor, and these tools dont encode a causal representation of how something works. Hence they cannot root cause and fix bugs. Fixing issues with 99% correctness snowballs into a hot mess very soon due to compounding errors. Somehow this is missed by people who dont actually code for a living.

If they have this why are they hiring, and how much code for openAI itself has it written.

And you believe this?

Surely then they have no swe reqs right?

The question isn’t “can AI code?”, the question is “can AI keep coding?”.

How do any of these companies create “an AI Software Engineer”? Scraping knowledge posted by actual engineers on StackOverflow? Scraping public (& arguably private) GitHub repos created by actual engineers? What happens when all of them are out of a job? AI gets trained on knowledge generated by AI? Where will the incremental gain come from?

It’s like saying I will teach myself to cook better food by only learning from recipe books I created based on the knowledge I already have.

Out of interest, why is the CFO the person commenting on this opposed to a product person?

If they actually had something like that they'd stop talking about it and release it.

Until we play with it, it doesn't exist.

All I will say is that she is the CFO of a company that want to sell """agentic""" swe models.

edit: typo.

How many developers want to have usage analytics of their editors helping companies build functionality that aspires to replace them? This is silly.

> Training LLMs on detailed interaction data from AI-powered IDEs could become a powerful flywheel leading to the automation of practical coding.

I agree. But this is a more general flywheel effect. OpenAI has 500M users generating trillions of interactive tokens per month. Those chat sessions are sequences of interaction, where downstream context can be used to judge prior responses. Basically, in hindsight, you check "has this LLM response been good or bad?", and generate a score. You can expand the window to multiple related chats. So you can leverage extended context and hindsight for judging response quality. Using that data you can finetune a RLHF model, and with it finetune the base model.

But it's not just hindsight analysis. Sometimes users test or implement projects in the real world, and the LLM gets to see idea validation. Other times they elicit tacit experience from humans. That is what I think forms an experience flywheel. LLM being together with humans during problem solving, internalizing approaches, learning from outcomes.

Besides problem solving assistance LLMs are used for counselling/keeping company/therapeutic role. People chat with LLMs to understand and clarify their goals. These are generative teleological models. They are also used by 90% of students if I am to believe a random article.

So the triad of uses for LLMs are: professional problem solving, goal setting/therapy, and learning. All three benefit from the flywheel effect of interacting with millions of people.

How is it supposed to learn to automate development by watching us not do things? Which is what the LLMs are used for currently.

Usually with Business or Enterprise plans, there's a privacy mode where OpenAI and Cursor / Windsurf can't train on user data.

The difference, though, is these AI IDE startups are essentially built on a fork of Microsoft VS Code.

And MSFT has many end game options to dump free IDEs on the market with integrated AI.

Not at all the same, because these startups are ultimately dependent on OpenAI or OpenAI-like model providers to be able to exist. So OpenAI isn't preemptively quashing competitors like Facebook did, rather moving further up and down the chain (chips -> data centers -> foundation models -> fine-tuned models -> AI-powered products) to expand their business.

Plus they already have a coding agent. This is beginning to feel like Yahoo 2.0.

When you have just raised $40 billion and you spend $3 billion on a company that has a product that you also build that is dumb as rocks.

People clearly want the subscription model where they don’t have to worry about API keys and such. I bet a huge chunk of this market is non technical people who can’t code and don’t realize how bad the code they’re writing is when Windsurf and Cursor chop off the context to make it cheaper to run.

Maybe enterprise customers. Open-source alternatives aren't really an alternative for many huge enterprises, due to the lack of support.

they get the people too... they are still hiring like crazy.

My uninformed and perhaps overly charitable interpretation: he warned them they were going to be steamrolled, they built their product anyway, and now OpenAI is buying them because (1) OpenAI doesn't want the negative publicity of steamrolling them all, and (2) OpenAI has the money and is a bit too lazy to build a clone.

I mostly use Claude, but have recently been playing with Gemini 2.5 and ChatGPT 4.1, and they've been great too, with slightly different strengths and weaknesses.

Ohh how cute. Until this small thing grows bigger and bigger and replaces you one day

This to me is a strong indicator that they are seeing the limits of current architectures and don't have a good solution to scaling to AGI.

> Related to a potential M&A from OpenAI?

related to locking in revenue, any dollar counts when your multiple is 100