Is OpenAI worth the $260 billion valuation... No, of course not, they're losing >$4 billion a year.
Are Cursor and Windsurf going to ask plugin devs to push to their own plugin stores in addition to VS Code's? Will they rally jointly behind a single open store? They need to have an answer to Microsoft here, and for the good of the ecosystem I hope they do have an answer, but customers will flee quickly if they lose access to all the proprietary plugins and to the broader ecosystem.
They should and probably will soon, and if I were them I'd even consider giving plugin devs a cut of their paying customer subs if MS gets competitive about it.
> but customers will flee quickly if they lose access to all the proprietary plugins and to the broader ecosystem.
Agentic AI coding is more important to customers than VSCode's extension ecosystem. VSCode is who has to worry in this equation unless they ship the same tools in the next few months and heavily subsidize them.
For users who've already switched to the forks, the cost of switching back is essentially zero, especially if Microsoft begins introducing changes that break fork compatibility. In that case, the migration direction would reverse almost overnight.
Cursor yesterday was a 45X for comparison (9B, 200M)
https://techcrunch.com/2025/04/16/openai-is-reportedly-in-ta...
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...
We've seen this before with Office.
We'll see it again.
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.
If autonomous agents were just around the corner, then why wouldn't OpenAI bet on their own Codex product obviating (most) need for an IDE and save themselves the $3 billion?
Of course, back to reality. Today, at least in my workflow, I use / like Windsurf but it is a small part of what I am doing. For any code I want to keep I mostly write it by hand (using vim for a very bare-bones / cognitive mode experience). For me, the real flow state occurs in vim while ChatGPT and Windsurf are great for exploration.
Have you used Cursor on a daily basis? I have. Every day for six months now. I haven't encountered a single bug that prevent me to work.
Moreover, while Microsoft tries to catch up lately, it's still very far behind, especially on the "tab autocompletion" front.
Microsoft provides the editor base, foundation models provide the smarts, and Cursor provides some, in my experience, extremely buggy context management features. There is no moat.
[0] https://knowyourmeme.com/memes/unfinished-horse-drawing-flam...
Maybe it's fine if you only do local development in other languages (Javascript?), but I completely swore it off.
Meanwhile GitHub web integration is approaching seamless in vs code. To the point I often forget I’m in a browser instead of the app, until an extension I use doesn’t work.
https://code.visualstudio.com/docs/copilot/copilot-customiza...
I gave up on Cursor because my trial ran out, while VS Code with Copilot doesn't seem to charge me anything.
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.
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.
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.
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.
What groundbreaking solutions does Windsurf offer?
I actually find it a little reassuring that they can't seem to get out of their own way.
The fact that they are is not the results of the Microsoft takeover.
And I have long held that they are hungry, shipping like clockwork on or about the 20th of every month, showing up with actual improvements all the time https://about.gitlab.com/releases/ It seems this month brings 18.0 with it, for whatever that version bump happens to include
They also have a pretty good track record of "liberating" some premium features into the MIT side of things; I think it's luck of the draw, but it's not zero and it doesn't seem to be tied to any underhanded reason that I can spot
This reminds me of "big companies moves slow.." line.
Buying competition while everyone’s still fighting might straddle you with a lame horse
Tale as old as time, song as old as rhyme: embrace, extend, extinguish.
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....
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.
They should have restricted the Marketplace several years ago, however, they are doing it now.
With C++, they are part of MFC's, they are the legal owners, not like Google vs Oracle in case of Java.
Lastly, with AI Code IDEs I think yes, there is a case, the need for IDE might be very less. Like a steering on a self driving car.
Microsoft software quality has gone downhill recently, and I'm not going to bet on them delivering something more polished than WS and Cursor here.
Side: all images on Microsoft websites are low resolution! it's like they don't even check their own website.
> 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.
> The other stuff could be more or less a VS Code plugin
The other stuff would take a team 6 months to implement. This is where the valuation comes from. Time to market, they are there TODAY.
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.
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-make...
They have certainly lost the monopoly.
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.
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.
I think that was when intel acquired McAfee for 8B in 2010.
i agree with you on this - it seems that openai hallucinates reality as much as their products do :-/
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
It's funny money / made-up value. This is not $3B cash.
- 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.
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)
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.
"Gemini 2.5 Pro Preview (I/O edition)" https://news.ycombinator.com/item?id=43906018
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.
In my experience Claude Code is fantastic, both for answering questions about the codebase and coding.
infecto•3h ago
_fat_santa•3h ago
When I went to download Cursor the other day I noticed that they do not offer any .deb/.rpm packages and just offer the FlatPak (could be a Snap I'm not sure). This just tells me they really dont understand the community and just wanted to ship something for Linux and be done with it.
onlyrealcuzzo•3h ago
I'm sure Cursor has more than few devs that primarily use Linux...
charcircuit•2h ago
This what all developers want for a platform. They can release their software and not have to worry about some "maintainer" switching out dependencies out from under them introducing bugs and crashes in what they shipped.
Cursor ships as an AppImage.
zero-g•2h ago
Whenever I tried Windsurf Editor, or their plugin for vim, and Intellij, it didn't feel polished at all. The basic function of autocomplete felt much much snappier on Cursor, and even on GitHub Copilot for vim/intellij.
threeseed•2h ago
Linux builds are in the AppImage format.
Which makes a lot more sense to me than deb/rpm when it's just a single executable.
TiredOfLife•1h ago
h8hawk•2h ago
whywhywhywhy•2h ago
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.
dbbk•2h ago
__jl__•2h ago
CURSOR shifted to a more agentic approach even for chat requests to reduce input tokens.
Previously, they used the good old RAG pattern with code dumps: Request with user added files -> Retrieval (when Codebase enabled) -> LLM requests with combined context from user and retrieval.
Now they seem to be doing something like this: Request -> LLM with tools to search code base and/or user-added files
I get constant search tool calls even for user-added files. Big reduction in input token but I think performance suffers as well.
WINDSURF is still willing to dump code into the context, which gives them an edge in some cases (presumably at a cost of input tokens).
Windsurf is willing to spent to acquire customers (lower subscription cost, higher expenses for llm calls). Cursor has a huge customer base and is working on making it sustainable by a) reducing costs (see above) and b) increasing revenue (e.g. "Pro" requests for 0.05 with more input and output token).