If investors think that the acquisition will increase the valuation of the company by 3B (or more), and the acquisition is paid fully or mostly in stock - then one can it basically for free.
The "Windsurf" brand has little value in comparison to OpenAI's, but $3B lets them hit the ground running with a proven developer product (better than Cursor IMHO), the team who created it, and a customer base.
Maybe ChatGPT told them it was a good idea? Considering the proliferation of these tools there's no way it's worth $3B. This functionality is going to be built into every IDE eventually: vscode just got an agent mode, it might not be great yet but it's only a matter of time until Windsurf is essentially just management tools because there won't be much editor value add available.
Precisely. For most users, there is hardly value in moving off of VSCode. Granted, if Windsurf can make itself into a VSCode extension, there may be some competitive value to it.
Isn’t Windsurf a VSCode-based IDE anyway (just like Cursor)? Basing it off the screenshots from their website.
I haven’t tried it, but if it is similar to Cursor (which I tried), then it hardly counts as “moving off VSCode”, which was one of the reasons I found switching to it easy. Cannot even really call it a move, if I can just quickly export-import all of my VSCode settings over (including themes and extensions), and they will all pretty much “just work” the exact same way and autoupdate from the exact same extension hub out of the box. Hell, even the UI is pretty much the same, so everything feels familiar, and i can be at least just as productive as usual immediately.
One of the biggest wins of VSCode (to me personally) is how functionally interoperable it is with other IDEs that are built off it.
Not necessarily. When growth is the priority, companies tend to expand along the value chain once they've established a foothold. For OpenAI, an IDE is a natural extension in a market where they're competing with Microsoft. It would be surprising if Anthropic didn't do the same soon.
This week OpenAI released newer models, so it could now use a reassessment. They are: gpt-4.1 family, o3, o4-mini. Users are benefiting from the ongoing competition which hopefully will last all the way to self-improving AGI.
You're soon going to find a rugpull whereby Windsurf will remove all Claude models. This is to be expected considering Windsurf has been bought by OpenAI.
If that does happen, good thing that Cursor is very similar. Being dependent on any one tool in this environment is folly. Though to be honest, in either case, I am personally dependent on Anthropic. Comparing Claude Code costs to Cursor/Windsurf using Sonnet, it certainly feels like I am temporarily VC subsidized, like early Uber.
It seems to me that all of this is going to be a giant rugpull in the end. "Oh, you are saving the cost of a $40/per hour contractor? Well, we'll just charge you $35.99."
Until then, we might be in the golden era of cheap building, maybe?
I do not regularly use either, but my impression is that Cursor's users have primarily been using Claude and are largely switching to Gemini, while Windsurf has a lot of existing enterprise contracts that wouldn't even notice an underlying model switch from the proprietary Codeium model to o3 mini or whatever.
I wonder what Cursor's market value is at this point. Definitey north of $10B right? Their founders and investors would be wise to exit while the AI market is still hot (and the rest is not).
To play devils advocate, software engineering is currently proving to be a hugely valuable use case for AI, and will almost certainly grow over time. I’m not sure what the market cap for software engineering tooling is, but I assume $5B or even $10B would only represent a tiny fraction of the TAM.
Here is one report that projects a $25B market by 2030. It would not take long to recoup their investment if that prediction comes true.
The software engineering market is one thing, but these editors are all basically VS Code + custom theme + calls to ChatGPT/Claude/Gemini. Useful, sure, but worth $5-10B each? Without users, revenue or even a brand?
The value right now is learning which prompts work, which strategies work, what is the sweet spot in terms of model size, is it better to run a model that costs 10 times more per token vs smaller inferior models that might need have 3 attempts at it, what are the best RAG and other enrichment strategies etc.
You can only really get that when you have a large market share.
When your IDE makes a call to OpenAI they get to see only half the picture they don’t know how the user reacts to the output.
So there is a lot of value in being in the client loop also and seeing the full picture.
> Here is one report that projects a $25B market by 2030
My guess it's much larger than $25B
This is no longer a market for software tooling, it's started to eat the software engineering salaries, freelancer marketplaces and consulting/outsourcing/bodyshop revenues...
If there are ~ 30M developers now globally, earning $100K/yr on average, and this will reduce it to 20M, so we get 10M * $100K = $1T
Even assuming that 90% will go to foundational models, not IDEs / coding agents SW, we still get ~ $100B
I’m putting most of my energy into AI these days but I don’t know anyone who doesn’t think there is a bubble, but an overvaluation early doesn’t mean the value isn’t there and won’t come later (see .com crash).
I don't get it, surely they can build it for less than $3B, and why would they need the Windsurf brand?
With stuff like this, they like the team that built it and want them on their side.
If you believe the founders/team is the right group to deliver a core product 3b is nothing to get them onside.
There is literally never a context in which 3b is “nothing”. Not even for a company that just raised 40b.
If investors think that the acquisition will increase the valuation of the company by 3B (or more), and the acquisition is paid fully or mostly in stock - then one can it basically for free.
The "Windsurf" brand has little value in comparison to OpenAI's, but $3B lets them hit the ground running with a proven developer product (better than Cursor IMHO), the team who created it, and a customer base.
Maybe ChatGPT told them it was a good idea? Considering the proliferation of these tools there's no way it's worth $3B. This functionality is going to be built into every IDE eventually: vscode just got an agent mode, it might not be great yet but it's only a matter of time until Windsurf is essentially just management tools because there won't be much editor value add available.
Precisely. For most users, there is hardly value in moving off of VSCode. Granted, if Windsurf can make itself into a VSCode extension, there may be some competitive value to it.
Isn’t Windsurf a VSCode-based IDE anyway (just like Cursor)? Basing it off the screenshots from their website.
I haven’t tried it, but if it is similar to Cursor (which I tried), then it hardly counts as “moving off VSCode”, which was one of the reasons I found switching to it easy. Cannot even really call it a move, if I can just quickly export-import all of my VSCode settings over (including themes and extensions), and they will all pretty much “just work” the exact same way and autoupdate from the exact same extension hub out of the box. Hell, even the UI is pretty much the same, so everything feels familiar, and i can be at least just as productive as usual immediately.
One of the biggest wins of VSCode (to me personally) is how functionally interoperable it is with other IDEs that are built off it.
It's obvious they can't build it for $3b, otherwise they would've created a competitor already.
Does it mean that OpenAI is realising that Llms are not going to improve that much so they are trying to expand horizontally.
Not necessarily. When growth is the priority, companies tend to expand along the value chain once they've established a foothold. For OpenAI, an IDE is a natural extension in a market where they're competing with Microsoft. It would be surprising if Anthropic didn't do the same soon.
What’s wild is that Microsoft who’s a big investor in OpenAI is competing with a similar product copilot
What's wild is that Copilot was literally the first system of this kind and ended up being the worst.
The only official-ish statement I’ve seen on this:
> Hey all this is speculation, probably stemming from earlier in the week when we had the joint livestream with OpenAI.
> There’s a ton of interest and attention on Windsurf rn which is awesome, but we are 100 percent focused on building amazing products.
> Not sure where this article came from, but we have some amazing updates next week that are gonna blow your socks off
https://old.reddit.com/r/windsurf/s/0CR07Qwkf9
I use Windsurf, but I only use Claude, it's just worked far better for me than OpenAI's models.
This week OpenAI released newer models, so it could now use a reassessment. They are: gpt-4.1 family, o3, o4-mini. Users are benefiting from the ongoing competition which hopefully will last all the way to self-improving AGI.
Tried them, sonnet is still where it’s at. Not sure what is the special sauce at Anthropic.
do u mean that Claude 3.7 Sonnet is still better for coding tasks than gpt-4.1 family, o3, o4-mini?
which version of Sonnet? thinking/reasoning or raw/one-shot?
Not who you responded to, but I use Windsurf pretty much daily. I keep trying new models but for actual code changes I keep going back to Sonnet 3.5.
3.7 can be useful for planning sometimes, but when making code changes it’s really hard for me to keep it from making unnecessary changes.
You're soon going to find a rugpull whereby Windsurf will remove all Claude models. This is to be expected considering Windsurf has been bought by OpenAI.
If that does happen, good thing that Cursor is very similar. Being dependent on any one tool in this environment is folly. Though to be honest, in either case, I am personally dependent on Anthropic. Comparing Claude Code costs to Cursor/Windsurf using Sonnet, it certainly feels like I am temporarily VC subsidized, like early Uber.
It seems to me that all of this is going to be a giant rugpull in the end. "Oh, you are saving the cost of a $40/per hour contractor? Well, we'll just charge you $35.99."
Until then, we might be in the golden era of cheap building, maybe?
Sure, why not? If OpenAI wants to have their own social network, might as well have their own IDE too.
Hmm... I thought they would buy Cursor yesterday. [0]
Anyway, it always makes sense to buy something much cheaper.
[0] https://news.ycombinator.com/item?id=43698819
I do not regularly use either, but my impression is that Cursor's users have primarily been using Claude and are largely switching to Gemini, while Windsurf has a lot of existing enterprise contracts that wouldn't even notice an underlying model switch from the proprietary Codeium model to o3 mini or whatever.
Windsurf users are mostly using Claude too.
Could be that they're negotiating with both in an attempt to create better price leverage. That's what I would do.
Didn't Windsurf just come out a few months ago? Wish I could read the article to understand how that number was reached.
The parent company Codeium last raised a Series C of $150M at a valuation of $1.25B: https://techcrunch.com/2024/08/29/github-copilot-competitor-...
That was in August 2024, before the vibe-coding meme hype, so $3B makes sense.
TechCrunch has a more recent article (https://techcrunch.com/2025/02/19/ai-coding-startup-codeium-...) that has the company valued at $2.85 billion but this was due to them being in talks to raise even more funding this financial quarter.
https://archive.is/N2zPT
And people say there's no AI bubble...
I wonder what Cursor's market value is at this point. Definitey north of $10B right? Their founders and investors would be wise to exit while the AI market is still hot (and the rest is not).
To play devils advocate, software engineering is currently proving to be a hugely valuable use case for AI, and will almost certainly grow over time. I’m not sure what the market cap for software engineering tooling is, but I assume $5B or even $10B would only represent a tiny fraction of the TAM.
Here is one report that projects a $25B market by 2030. It would not take long to recoup their investment if that prediction comes true.
https://www.globenewswire.com/news-release/2025/03/26/304970...
The software engineering market is one thing, but these editors are all basically VS Code + custom theme + calls to ChatGPT/Claude/Gemini. Useful, sure, but worth $5-10B each? Without users, revenue or even a brand?
The value right now is learning which prompts work, which strategies work, what is the sweet spot in terms of model size, is it better to run a model that costs 10 times more per token vs smaller inferior models that might need have 3 attempts at it, what are the best RAG and other enrichment strategies etc.
You can only really get that when you have a large market share.
When your IDE makes a call to OpenAI they get to see only half the picture they don’t know how the user reacts to the output.
So there is a lot of value in being in the client loop also and seeing the full picture.
You know who else has that data, that too for free? OpenAI.
OpenAI only sees half the picture, that’s why they want to be in the IDE also so they can get all the usage metrics from the user viewpoint.
> Here is one report that projects a $25B market by 2030
My guess it's much larger than $25B
This is no longer a market for software tooling, it's started to eat the software engineering salaries, freelancer marketplaces and consulting/outsourcing/bodyshop revenues...
If there are ~ 30M developers now globally, earning $100K/yr on average, and this will reduce it to 20M, so we get 10M * $100K = $1T
Even assuming that 90% will go to foundational models, not IDEs / coding agents SW, we still get ~ $100B
I’m putting most of my energy into AI these days but I don’t know anyone who doesn’t think there is a bubble, but an overvaluation early doesn’t mean the value isn’t there and won’t come later (see .com crash).
Why not? If it captures enterprise IDE market, it's definitely worthy of the valuation implying the future growth potential. Jetbrains is valued at 7B
Has anyone used both Windsurf and Cursor? Which is preferable?
IMO, Cursor has a significantly better user experience. Cursor's just seem better designed and cursor's agent mode is better.
Didn’t think Major M&A’s from OpenAI would start this early.
[flagged]