OpenAI reaches agreement to buy Windsurf for $3B
603 comments
·May 6, 2025bko
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.
sagarpatil
I’ve been a WindSurf customer since day one. It was my first true AI agentic experience.
[Dev mode] While working on Alembic migrations I broke one of my migration files. After an hour of manual debugging I handed the task to WindSurf. It methodically checked every config file, applied the migrations one by one, and narrowed the issue to a single file. It rewrote the migration, verified the fix, wrote tests, ensured everything passed, and opened a PR. I reviewed it and it worked flawlessly.
Regarding the acquisition I don’t understand why OAI would pay $3 B. The team is strong, they have lots of data, and the agentic flow is great, but all of that feels commoditized.
Claude Code launched two months ago and I prefer it to WindSurf, Cursor, and Aider. Augment Code also ranks above WindSurf for me.
If I were in Sam’s place I would have doubled or tripled down on Codex CLI. Just my 2 cents.
dayjah
I was involved in an M&A once; my role was to evaluate the technology and determine how long it would take us to build a competitive product. If it was less than some X then we’d build it, greater than X and we’d buy. The function for X was not clear to me from my perspective; it had legal fees involved, etc.
The person leading M&A said an intangible aspect of the price is what it does to the adjacent market. If the leading product A is valued during a raise at $Y, and you buy the next best product B at 1/10 that, you cause future issues with raises for A.
Might this be an attempt to clip Cursors wings?
pc86
That's a really interesting thought, I'd love to get involved in software PE/M&A on the technical analysis side but I don't have the academic pedigree for it (it seems every shop that does this work is 90% Ivy and Ivy-adjacent universities and FAANG-level work history).
So if I'm understanding your point then part of the value in paying $3B for Windsurf is that it acts as a pricing anchor on future raises (and presumably acquisitions as well) for competing products? So Cursor is less likely to raise at a $30B valuation if Windsurf is 95% as good and just sold for 1/10 that.
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foobarian
I would also think that a critical component of X there would be the opportunity cost of time spent on building in-house while competition chugs along.
anonzzzies
> WindSurf, Cursor, and Aider. Augment Code also ranks above WindSurf for me.
Bring on (a lot) more competition! I am waiting for the point where "Simple Pricing" (Augment Code has that on the pricing page) means fixed pricing; Simple is NOT '600 messages included' because it's impossible to know what the ROI from those 600 messages is, so it's very far from 'Simple' (many of those prompts will deliver nothing or, worse, having to rollback because the agent produced garbage). I know it's not sustainable, but the only thing that will keep me not jumping from one to the other, signing up with different emails, trials, coupons etc is if they will lose the restrictions on usage. They will, as they have to compete and it's worth it seeing this acquisition; losing 10s of millions a month to get/keep people and getting nice growth is what they do to get the billions. So bring it on!
boringg
If he's (Sam) trading equity on a grossly inflated OpenAI for the acquisition then he's likely not paying real money for the company and thus he is expanding his roadmap for cheap.
adventured
They're paying $3 billion because money is hyper plentiful for OpenAI at present. Basically because they can. Money isn't their problem right now, it's not a scarce resource (maybe it will be in the future of course). They're trying to capture and lock-in, so as the hurdles and regulations go up they're one of the huge winners left standing.
Try replacing Uber today, it's impossible. Nobody is going to give you billions of dollars to try to do it. It'd be an absolute nightmare to attempt it.
mike_hearn
Uber has already been replaced, at least in some parts of the world. We recently went on holiday to Malta and on check-in the hotel staff told us not to bother with Uber, Bolt worked way better and had more drivers (Bolt is a European Uber competitor based in Estonia).
So we signed up for Bolt and sure enough drivers were plentiful, the app worked great and there was no downside over Uber. I'll certainly be trying it again in future in other markets.
The reason Uber invested in self-driving cars for years is that otherwise they have no sustainable edge. It's just a taxi company, which is a low margin business. People who can make slick mobile apps are plentiful and it takes a minute or less to sign up for a new service. Uber grew to its current size by buying market share using investors dollars, which was always a time-limited strategy. Once they started having to turn a profit prices rose and their edge over their competitors was lost.
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moeadham
sometimes companies are acquired for things the public has not yet seen.
johntarter
Companies are acquired for customer base, ARPU, and growth. Same criteria as when when raising funding.
arrowsmith
In this case, maybe it's an acqui-hire?
jjallen
Because they have users and OpenAI has seen the massive drop off in coding usage since Claude Code came out. My personal Chatgpt decline is at least 99%. It’s also 1% of their current market value. So not really a big deal.
neets
It’s probably those big Fortune 500 corporate customers and getting a look inside their code bases or at least get to know their use cases
bingemaker
Is there a writeup or a recording. Would be nice to follow through
bfeynman
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.
sigmoid10
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.
thomashop
But aren't they getting this data already at a much larger scale? GPT is still one of the backbones in many coding assistants, even Windsurf.
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bcx
Incredible timeline - also helpful to understand the OpenAI side.
1) OpenAI is valued at 300B (as of March 31st) https://openai.com/index/march-funding-updates/
2) OpenAI recently raised 40B from SoftBank and others.
3) Windsurf is getting roughly 1% of OpenAI's valuation.
OpenAI needs to keep moving fast to outpace MS, Google, and others -- and I think we can all agree that agentic coding is a major trend -- that is likely to keep growing really fast -- and super high leverage in that the folks doing the coding are well paid -- and more likely to be early adopters than any other field. (e.g. if openAI wants a fast way to grow beyond $20-$200/month, owning a tool like windsurf is a good move)
Some folks have been speculating the cash/equity split. I'd be confident whatever number they arrived at de-risks things for windsurf, and preserves the right amount of cash on hand for openAI.
Even if OpenAI is burning 10-20B a year, with the recent raise would buy them between 1-2 years, and given the pace of AI development that's a pretty long time.
rpgbr
It's a bubble about to pop. That's where the value is coming from.
throw234234234
5 years ago if you said coding tools would be worth in the billions in value it would of been surprising to most people. Dev Tools were the thing you could never get a company to buy for you or were just free for most people. Interesting times.
mike_hearn
Dev tools are still very hard to sell (I know, I have a dev tools company). Claude Code, Aider and Codex are given away for free. What people are buying is access to proprietary general purpose models.
ignoramous
Bubble or not, given the exit, Windsurf's (Codeium) focus on enterprise sales motion has been rewarded rather handsomely: https://research.contrary.com/company/windsurf / mirror: https://archive.vn/ThWNz
alexchantavy
Yeah, in the recent Lightcone Podcast episode, Varun was talking about how they have a lean eng team but large sales org. I thought that was super interesting for a dev tool since I was expecting a dev tool to involve bottom-up sales to the dev instead of top-down sales to a leader like a CTO or VP of Eng
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madduci
It's all about stocks
moralestapia
The right time and the right place, plus they did the work, ofc; but I'm sure 80% of this site has worked as hard as, or even more, than what it takes to clone VSCode.
I'm jelly. Very rarely you see in history someone lucky enough to be riding the absolute top of the wave. Even OpenAI took about decade to cook their breakthrough product.
SwtCyber
Totally agree - a lot of the "magic" still feels like it boils down to whoever has the best underlying model
mvkel
The value is in the prompts being sent to OpenAI. Massive training depository.
Only thing better would be a social network, which supposedly they're working on.
bufferoverflow
But OpenAI already knows every single prompt sent to its models. They don't need to buy Windsurf for that.
mvkel
That's a bit like saying having access to Google is as good as being Google.
All they really see as a model provider is little fragments of the picture, like trying to reconstruct the Mona Lisa by knowing which paint swatches Leonardo used.
In other words, they only saw whatever Windsurf sent as context with a "fix the bugs" prompt stapled to it.
By owning Windsurf, they see the entire source code of what's being built, all the time, plus how the model is interacting with it.
There's a massive amount of value in what happens client-side, and behind the scenes. The "director's cut" of context.
Huge difference.
NitpickLawyer
There's much more to be gained if you also have the client side of those interaction. You can get signals from "accepted" completions/plans/etc, number of edits made to those completions, how users use context, what was passed in context from a code base, and so on.
And that's just on their models. They'd also get (at the very least) signals on their direct competition, if not straight up prompts+completions as well.
Mtinie
Now they also get to see what is sent to Anthropic, Google, DeepSeek, etc., and what is returned. At scale, for a prime area of concern.
Iolaum
I think part of the value is customer acquisition rather than product.
retornam
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
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
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
> 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
worldsayshi
So they are effectively blowing their own bubble?
conartist6
That is what it looks like from where I sit, yes.
They built all of this assuming VSCode was a solid foundation for the next 30 years and I've completely undermined VSCode's technical foundations. Their castle is gonna sink into the swamp...
ergocoder
JetBrains makes $400M in revenue and is 10+ years old. Cursor is 1 year old and makes $300M in revenue.
One is going to be valued at a much higher multiple than the other.
retornam
$400M in real revenue versus $300M in annual recurring revenue (ARR) are totally different things. Real revenue is money actually earned, while ARR just multiplies one month's subscription revenue ($25M) by 12, ignoring customer churn.
Startups love flashing ARR figures because "$300M ARR" sounds impressive, but without knowing churn rates, they might never actually collect that full amount.
JetBrains however collected real $400M in a year.
ergocoder
I don't think that distinction changes how much each of them is worth relatively to each other.
Achieving $300M ARR in 1 year is extremely extremely impressive regardless of churn or any other metrics really (assuming reasonable numbers). Being valued at $9B because of it doesn't seem out of line.
I'm skeptical of Cursor and not using Cursor myself. I actually use IntelliJ because I write Java.
Cursor's valuation is not unreasonable. But somehow you phrase it like $9B valuation for the fastest growing company that achieves the highest revenue per employee in the history of modern civilization is out of whack somehow.
blackoil
Unless you have reason to believe the revenue is declining in recent months or will decline in near future, ARR is a better metric. last year real revenue made sense only for low growth companies.
anxman
I’m spending more on Cursor every month. Worth every penny. I’ve never given a dime to Jetbrains.
ninetyninenine
I feel jetbrains is squandering an opportunity here. Cursor is significantly easier to build then any IDE in the jetbrains ecosystem. The technology jetbrains is very hard to replicate. While the technology cursor uses should be trivial to replicate.
If jetbrains can combine there IDE technology with cursor technology, that would be ideal.
I think the problem is jetbrains tech is sort of already very biased in a certain direction and it's hard for them to pivot as fast into this new AI direction.
mike_hearn
JetBrains launched their cursor competitor a few weeks ago.
I prefer Claude Code still because it has access to more tools - Junie seems unable to fetch URLs and do other things. But that's a tiny gap that JetBrains can close quickly, and the Junie UI is quite pretty. Plus, inside the IDE they can equip the model with far more advanced tools than Claude Code will have from the CLI: inside Code Claude has to explore the codebase by banging stones together with ripgrep, whereas in the IDE it can be equipped with tools to access the indexes and navigate around like a human would.
In theory, JetBrains should be able to compete very strongly in this market. Their single line completion model is already excellent.
Snakes3727
They literally have that it is called Junie and after comparing cursor to it we settled for Junie as it does a good job with rust unlike cursor.
myflash13
> If jetbrains can combine there IDE technology with cursor technology, that would be ideal.
Just give them some time, they're not stupid. I'd drop Cursor in an instant once JetBrains catches up, because IntelliJ IDEs are just a way more powerful.
samdjstephens
Just consider what it fundamentally is: a company at the leading edge of a product category that has found absurdly strong technology/use-case fit, and is growing insanely fast.
Looking for a moat in the technology is always a bit of a trap - it’s in the traction, the brand awareness, the user data etc.
lolinder
> Looking for a moat in the technology is always a bit of a trap - it’s in the traction, the brand awareness, the user data etc.
Traction, brand awareness, and user data do not favor Windsurf over GitHub Copilot. The few of us who follow all the new developments are aware that Windsurf has been roughly leading the pack in terms of capabilities, but do not underestimate the power of being bundled into both VS Code and GitHub by default. Everyone else is an upstart by comparison and needs some form of edge to make up for it, and without a moat it will be very hard for them to maintain their edge long enough to beat GitHub's dominance.
samdjstephens
Definitely take that point. But this valuation is perhaps more about how much that traction, brand and data is worth to OpenAI, who cannot buy Copilot. $3bn doesn’t seem so disproportionate in that context especially given the amount of money being attracted to the space.
beardedwizard
But copilot is bundled and is free, and it's still losing to cursor
supportengineer
High valuations for companies you've never heard of with no moat - it comes down to cronyism/nepotism/fraud.
quantadev
Yeah it seems like there's really no "adult supervision" at all in OpenAI. This purchase was a panic move. Windsurf would be worthless without the AI. Probably OpenAI knows that AI is now a commodity technology and no longer a space they can monopolize so they're just trying to get off a ship that's sinking, and find some viable path to having a tech that doesn't ultimately depend on OpenAI even having a monopoly any longer.
blueboo
OpenAI needs a product team
hiring is hard
it's a high-functioning team swimming in contemporary design and eng practices
code is emerging as an important battleground
OpenAI has the $$$
owebmaster
It is ironic that the company said to be cooking AGI is acquihiring software engineers because they can't develop it in-house.
bufferoverflow
I bet they can hire best minds in the world for a fraction of $3 billion.
johntarter
If that's so, then why is Codex such an inferior product to Claude Code? And why haven't they already built an code editor or at least VS Code extension yet?
raincole
JetBrains has been making IDE for a decade. They were the only company that actually made money by selling IDE. So I assume they have the best programmers who understand IDE.
However they fail to make a Cursor competitor so far. This alone suggests it's a harder task than meets the eye.
goodluckchuck
If OpenAI just provides AI, then the various IDEs development wrappers / IDEs / low-code etc. can collectively bargain against OpenAI for low rates. If OpenAI has an alternative, then they can charge higher rates for all plugins/ etc. and give the market an alternative.
retornam
If enterprises require fewer software engineers, where will the market for IDE development wrappers come from?
raincole
Enterprises won't require less software. If they require fewer software engineers, that would be those few engineers producing so much more software with better tools, for example, AI wrappers.
owebmaster
if enterprises require fewer software engineers, medium/small companies will have access to a higher quality software engineering.
goodluckchuck
If software engineers are more effective, I would expect there to be more software engineers. They’ll put out more and better code. More code means more engineers.
The contrary view is like saying gold miners are finding more gold, and it’s easier than ever, so we expect folks are going to leave town.
arthur-st
They have a healthy enterprise customer base, and an engineering team that clearly knows how to work with power users (which OpenAI is bad at).
shortrounddev2
> What am I missing here?
That AI is in a bubble akin to the crypto craze from a few years ago, and the valuation of these companies is divorced from their underlying business fundamentals
Androider
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_sub...
[1] https://www.reddit.com/r/cursor/comments/1kbt790/rules_in_49...
leonidasv
The thing is: we should not need standalone editors just to use AI coding agents. They could be just plugins, but Microsoft does not want to bend the plugin API enough for that. Windsurf has a "plugin edition" for JetBrains IDEs that works really, really well[0] (they also have a VSCode plugin[1] but it's lacking in comparison).
However, given that JetBrains also have their own AI offering[2], I'm not sure how long that will last too...
[0] https://plugins.jetbrains.com/plugin/20540-windsurf-plugin-f...
[1] https://marketplace.visualstudio.com/items?itemName=Codeium....
owendarko
There are already a bunch of open source, free, and popular "AI coding agent" extensions for VS Code:
1) Cline (1.4mil downloads)
2) Roo Code (a fork of Cline, 450k downloads)
Still a drop in the bucket compared to Cursor in terms of # of users, but they're growing pretty fast.
Disclaimer: I maintain Kilo Code, which competes with 1) and 2) so I'm pretty familiar with this space/the growth patterns.
dhc02
I am constantly surprised how seldom aider is mentioned in threads like this. I understand that it's not directly integrated into the editor, but the "editor + parallel CLI tool chain" paradigm feels so natural to me because we drop to terminal for so many other parts of building software. If you haven't tried it (particularly the architect/editor modality), it's worth a couple of hours of experimenting.
tomrod
Continue.dev as well
htrp
How are you differentiating from the cline/roo's of the world?
no_wizard
I suspect JetBrains will never limit this. I've yet to recall anything in the past where they have done this even when they have a similar offering.
In fact, their own AI extension appears to be pluggable in and of itself. I think they see the value in being easy to adapt different AI solutions to rather than trying to only provide their own.
nicce
JetBrain's main business model depends on buying the editor, and if users still see the overall editor better, any AI plugin support will likely just increase the sales.
silverwind
> They could be just plugins
No, they should be LSPs so that they can be integrated into any editor, not just VSCode.
rs186
Microsoft has been dragging their feet when it comes to updating the LSP spec. Many of their Copilot features are done in VSCode, in fact using private APIs that are not accessible to other extensions.
I am all for everyone adopting LSP, but the reality is harsh.
forrestthewoods
LSP is amazing but also kinda sucks balls. It’s impossible to run VSCode without a million pops in the corner with a million extension errors. It’s so bad.
And autocomplete is the least interesting thing an LLM can do. Cursor’s UX isn’t the end game but has lots great features.
The ideal UX is still being worked out. It’s good that different people are building tools to try different ideas.
sanderjd
They should do this, but this is not the entirety of what they do.
Frotag
> Microsoft does not want to bend the plugin API enough for that.
What doesn't the current API allow plugins to do? I'm guessing custom UI stuff that lives outside a panel?
iambateman
Is windsurf essentially the same as cursor? I didn’t realize there was something similar for JetBrains but if it’s a cursor-equivalent for JB that would be wonderful.
macrolime
Yes
sanderjd
I haven't found any of the jetbrains options (including Windsurf) nearly as satisfying to use as Cursor. But YMMV I guess!
doix
> 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.
I agree with the first part, I'm much less optimistic about the second part. I suspect they will create something that is worse, but cheaper if you already pay for Github/Office 365/whatever. Then many large enterprises will switch to save money whilst the engineers complain, just like with Teams.
pjmlp
They already succeedd well enough that VSCode is the only Electron app I tolerate on my private systems, naturally on device assigned ones I have less control.
madeofpalk
I mean they already have. GitHub Copilot was the first LLM coding tool before "LLM" was in the lexicon. MS/Github kind of squandered their lead with it, but they released Agent Mode a few months back https://github.blog/news-insights/product-news/github-copilo...
Aeolun
That seems pretty bold. I still find myself switching to basically anything but the VS code copilot agent any chance I get.
chrisweekly
Can you expand on that? What's so bad about VSC's copilot agent? What do you switch to?
preciousoo
If the VS Code team are delivering the product, I have some amount of trust. If it’s the VS team, good luck to everyone involved
ctkhn
I use vscode for personal javascript projects but the time I spent on a .NET team using VS was an incredible downgrade compared to years and years of intellij. I ended up leaving because tech debt/bugs kept causing weekly overnight on call incidents that we were never given time to fix, but when they asked who wanted a Rider license I got myself on the list immediately.
deburo
Indeed, Copilot within Visual Studio is nowhere close as good as Copilot within VSCode, and even that is still worse than Cursor in my experience.
pjmlp
VSCode is still miles behind for .NET and C++ tooling, have a bit of fate on VS team.
slt2021
VS developers are okay, it is the VS product managers that are The problem
bn-l
Copilot owns the platform, had an amazing head start and yet still is the worst option available. I don’t mean to be harsh but this was a titanic fumble.
beardedwizard
GitHub has been failing upward for more than 5 years. They could have totally dominated software development and security - failed. Could have been the undisputed champion of code hosting - failed. Should have dominated development co-pilots - failed.
I actually find it a little reassuring that they can't seem to get out of their own way.
stevage
They're not the champion of code hosting?
sofixa
To be fair, they have been behind the competition for many years. Gitlab had extremely good CI, security scanning, organisational concepts, etc. for years before GitHub introduced their ones (and Actions still has a worse UX, and GitHub still doesn't have anything below an organisation).
aravindputrevu
I still can't believe how they let Cursor (which is amazing until somepoint) take away all the shine.
This reminds me of "big companies moves slow.." line.
jayd16
I'm curious what the cost per user is on Copilot. It doesn't make sense for them to be a loss leader so they're probably running the model at cost or a profit compared to the startups that have more of an incentive to scramble for market share.
bongodongobob
I'm too lazy to grab my work laptop, but one of the funniest things about copilot to me is which one? There's M365 copilot, Teams Premium (which gives you copilot in Teams), browser extension, the coding plugin, and others. It's been extremely time consuming to field requests from our users because every time our help desk gets a request for it, they have to have a conversation about which one the user is asking about. They don't even know, and of course I can't blame them.
Szpadel
For someone that never used windsurf, what features does it have that GitHub copilot does not? Reading their webpages I didn't spot any "killer feature" that would convince me to switch.
I always felt that cursor and windsurf should be just extension to vscode instead of a fork. Was there some missing functionality is vscode that was missing? Is it still missing?
There are some extensions that work in this way and allow to use multiple implementations depending on task at hand without any long term commitment.
I feel like such fragmentation is by artificial just to lock users in single ecosystem.
jstummbillig
It can write a lot of code, that works, better than vscode can (right now).
It's in a lot of ways the OpenAI story itself: Can they keep an edge? Or is there at least something that will keep people from just switching product?
Who knows. People have opinions, of course. OpenAIs opinion (which should reasonably count for something, them being the current AI-as-a-product leader) is worth $3B as of today.
mliker
Windsurf works well with Claude and Gemini models, so if OpenAI forces Windsurf users to only use OpenAI models, then it wouldn't be as useful.
oefrha
The differentiator of Cursor is it’s way smarter at basic code completion than GitHub Copilot. I pay for Cursor instead of GitHub Copilot even though I get the latter for free from open source contributions, and I made that decision after five minutes of usage after using Copilot for what, more than a year? I won’t even talk about how Cursor guesses where I’m going to edit next and makes the correct edit most of the time, just the fact that Copliot makes completions that result in unbalanced parentheses/braces all the time and Cursor doesn’t makes the switch a no-brainer; that’s not even a fucking AI problem, you just need to look around and see that function you just completed already has a closing curly brace, all it takes is some traditional AST analysis if your model is dumb. (Copilot made zero progress on that issue during my time using it, but I can’t say if that was fixed after I ditched it.)
peteforde
Same. Cursor might be the only tool I've purchased a year's subscription to before the end of my free trial.
I've tried just about every model on its own over the years, and yet there's something about the Cursor workflow that frequently still gives me chills when it shows me again that it had clearly anticipated what I would think next in a way I just don't experience with other tools.
Holistic seems like the right word?
If it's all smoke and mirrors as some folks imply, then it's Penn and Teller level smoke and mirrors. Beware those who tell you that they could duplicate anything of value in a weekend.
moi2388
My experience is the same. And the agent mode in copilot is terrible, it simply will stop halfway through files.
Or you chat and suddenly it wants to use the azure copilot instead because reasons.
Horrible experience.
ZeroTalent
It's better at coding, but they are essentially paying for users.
I would also argue that the product could be built over two weekends with a small team. They offer some groundbreaking solutions, but since we know that they work and how, it's easy to replicate them. That also means they have significant talent there.
Hence, they are also buying the employees.
The code base itself is basically worth nothing, in my opinion.
koakuma-chan
> They offer some groundbreaking solutions
What groundbreaking solutions does Windsurf offer?
throwaway7783
What groundbreaking solutions specifically?
johntarter
I'm going back and forth between Windsurf and Github Copilot right now. Windsurf's development iteration speed is much fast and features are added faster.
For example, Github only autocompletes based on what file you have opened in the current editor's tab. Windsurf indexes your entire code base and seems able to autocomplete based on what other files you have in your project. Autocomplete also spans across multiple lines and open tabs.
Windsurf's agentic tool (Cascade) can run terminal commands and read the output without opening a terminal like copilot. It can undo the agent's actions easier than Copilot. Though I think Cursor is superior in that regard, it can undo multiple checkpoints.
Still evaluating Windsurf but it, Cursor, and Claude Code are all more sophisticated than Github copilot at the moment. I'm sure copilot will catchup but by that time the other tools may have already iterated ahead.
horns4lyfe
The feature they have over copilot is “not sucking”
marricks
Wow, folks almost had me convinced MS turned a new leaf 5 years ago.
Tale as old as time, song as old as rhyme: embrace, extend, extinguish.
tomnipotent
Do you consider the Microsoft-managed plug-in marketplace and infrastructure to be a private or public resource? From my understanding Microsoft has never been vague on the position that the plugin marketplace is exclusive to the official VS Code distribution, and the TOS specifically forbids forks from doing so.
Cursor and other forks have decided to circumvent this, some even going so far as to use proxies to bypass restrictions.
I'm not convinced Microsoft owes other billion dollar companies free access to a product they've built, curated, and supported for over a decade. Plug-in authors are not restricted from publishing their products on competing marketplaces.
pjmlp
Nah, folks keep giving human behaviours to big corporations instead of understanding everyone is in the game for the shareholders.
aero142
If a company can align it's business model with user goals, then it can work in the long run. Apple has somewhat aligned it's integrated hardware sales business model with user privacy. Google and Meta are advertising companies and capturing user data and attention will always drive the business.
johntarter
Satya's talked about how some acquired companies such as LinkedIn and Github are allowed to operate independently for the most part and keep their culture. Or else we'd all be using Teams instead of the LinkedIn messaging feature!
dontlikeyoueith
> Microsoft will likely replicate Windsurf and Cursor's features within a year.
Probably.
> And deliver them with far greater stability and polish
That seems ... overly optimistic given MS's history.
Onavo
Their devtools team is surprisingly competent when they choose to be. Pre-2015, people used Sublime Text, Atom, Textmate, Notepad++, Light Table, Brackets, Emacs/Vim, Intellij. VS code single handedly crushed all of them with code completion and language servers that require zero configuration. Emacs/Vim lost share, Jetbrains (and also Eclipse) were forced to release their own "lightweight" code editors, and everybody else became mostly irrelevant (except perhaps Sublime Text since it has the best native performance out of all editors).
no_wizard
I would contend that JetBrains has only grown even with VS Code around. They're still more than viable, support things on a near similar cadence (and even in some cases, faster and/or better) than VS Code gets support for it.
I agree with the rest, they've all mostly lost market share or completely no longer exist due to VS Code, but not IntelliJ, that platform is going really strong.
Though no doubt, VS Code has pushed JetBrains to rethink some things, and be better in general.
bwfan123
100%, I swore by emacs, but then switched to vs-code recently, and believe-me, switching editors is one of the hardest things to do due to ingrained muscle-memory - but vs-code made it easy with emacs-mode etc.
vs-code is one of the few products coming of of microsoft that leads the pack by a big margin, and it is no surprise that all of these startups are forking it.
dontlikeyoueith
VS Code is pretty much the only exception to their overall quality level.
One exception in 50 years does not inspire confidence.
elevatortrim
Microsoft is owing its bad reputation to Windows, Office, Sharepoint!!!, Teams (and more?). The quality of developer tools and languages (C#, Visual Studio, Code and .NET Ecosystem, Azure UI is also great) from Microsoft has been flawless (with some exceptions like webforms, or ui code generation tools of the past).
whynotmaybe
Their tooling have never been flawless, and it still isn't.
Only for azure devops, there are +6k problems listed on developer community website with 500 still not closed for the last 6 months. [1]
The complete integration in the ecosystem is what's flawless.
Any company with a better product has to fight that integration and they almost always lose (Sybase, Borland, WordPerfect, Lotus, Netscape...)
1 : https://developercommunity.visualstudio.com/AzureDevOps?ftyp...
senko
Putting "Azure" and "flawless" into the same sentence shows we might have very different expectations for "flawless".
blibble
have we used different Visual Studio's?
it was crap compared to Borland's products 20 years ago
and today it's crap compared to JetBrains'
and christ knows how anyone could consider the Azure UI to be "great"
other than Teams I don't think I've used a worse piece of software
bigbinary
These are investment plays a company makes when holding too much money, and not a smart move this early in the technology imo
Buying competition while everyone’s still fighting might straddle you with a lame horse
Taylor_OD
I was a little late to jump on the cursor bandwagon but finally downloaded it because i liked the LLM chat interface in the sidebar. By the time my free trial ran out, VSCode had added a LLM chat interface in the sidebar. Yes Cursor had a bit better auto complete and maybe a few other things but it wasnt good enough that it was worth paying for.
But I'm glad OpenAI is getting into the tooling space in this way. I cant wait to use all the cool features they build after VSCode rips them off.
cheema33
> By the time my free trial ran out, VSCode had added a LLM chat interface in the sidebar.
I am guessing you are talking about GitHub Copilot when you say VSCode. GitHub Copilot is far far inferior product when compared to Cursor, Windsurf or Augment Code. Most people who try almost any Copilot alternative for a reasonable amount of time end up canceling their Copilot subscription. I did, after two months of using both.
RobinL
How long ago was that? 6 months ago I switched from VS Code to Cursor, which at the time was FAR superior to Copilot. Around a month ago I switched back to VS Code, and found there's not much difference any more. Autocomplete in VS Code is still less good, but the agent mode in VS Code feels pretty similar to Cursor's (albeit a little slower, perhaps).
To be honest I think both are quite limited by context length (in that they try to limit the context they send to the LLM and hence cost), and so I find myself using Gemini 2.5 in AI studio with the 1m context length, and asking it to generate instructions for Copilot (which seems to work pretty well)
twobitshifter
there is now an integrated agent mode in vscode as of 3 weeks ago https://m.youtube.com/watch?v=dutyOc_cAEU&pp=ygURYWdlbnQgbW9...
szundi
[dead]
resters
- 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.
SwtCyber
Yeah, this feels less like a "we can't build it" move and more like a "we can't afford to wait" one
resters
> "we can't afford to wait"
True, but how long does it take to build something similar? I see it as a defensive move, probably good for the industry to let some people with innovative ideas in AI cash out now so they can do the next thing.
herval
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
> 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
Your take on lawyers is absolutely insane. If you don't think the extremely specialized and well trained professionals can successfully navigate contracts then I can't wait for the absolute garbage the LLMs spit out when faced with similar challenges.
Honestly, same for doctors and accountants. Unless these model providers are willing to provide "guarantees" that they will compensate for damages faced as a result of their output.
Doctors and Lawyers are required in many areas to carry malpractice insurance. Good luck getting "hot new AI legal startup" to sign off on that.
herval
> one can imagine a model like o3 completely replacing 90% of white collar jobs that involve reading, writing and analysis
Wake me up when there’s any evidence of this whatsoever. Pure fantasy.
SwtCyber
ChatGPT's popularity doesn't automatically translate into dev adoption
lolinder
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
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
bix6
~$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-ta...
ergocoder
Investment vs. acquisition is going to have different price points.
At $40M ARR, I assume the founders don't really need to make more money and are not in a rush to sell. Therefore, the price would go even higher. This can't be compared with investment where the founders still retain the control.
Cursor is probably the fastest growing company in the history of our modern civilization. Achieving a really high multiple doesn't seem out of line.
I'm skeptical of Cursor but I can see why they achieve that high valuation.
airjason
keep in mind a lot of $3B is ClosedAI paper money, so 75x ain't that ridiculous.
bix6
Do you know the cash / equity split?
moralestapia
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).
ashvardanian
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
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.
crsv
Man why did these guys do that OpenAI couldn’t replicate for less than 3Bn on reasonable timeline? This seems insane.
arthur-st
They have an old-school enterprise sales operation that is doing superb work. Apart from that, ChatGPT's projects are useless crap (can't read other convos in a project; can't generate project documents from a convo), and so clearly they would get value out of just getting some developers who have built anything of use to a poweruser.
lnenad
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)
Taylor_OD
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
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?
apwell23
I would switch in heartbeat if openAI built something equivalent.
conradfr
I guess $3B of vibe coding credits with ChatGPT can't create Cursor.
fcanesin
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.
xnx
> 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
fcanesin
LMAO, like one hour after. And guess what, it is a coding upgrade .
qoez
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
They launched a new version of Gemini 2.5 Pro today.
https://developers.googleblog.com/en/gemini-2-5-pro-io-impro...
ukuina
So soon after Gemini 2.5?
casey2
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.
frabcus
There's an in between case, where LLMs are useful and give coders a (say) 20% speedup, and everyone has to use them. They don't have to be perfect to be a big industry!
bionhoward
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
Where's this non-compete clause? In ChatGPT T&Cs?
sensanaty
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.
https://archive.md/l6n9H