[HN Gopher] Cognition (Devin AI) to Acquire Windsurf
___________________________________________________________________
Cognition (Devin AI) to Acquire Windsurf
Author : alazsengul
Score : 489 points
Date : 2025-07-14 18:07 UTC (1 days ago)
(HTM) web link (cognition.ai)
(TXT) w3m dump (cognition.ai)
| samyok wrote:
| Important context from the tweet:
|
| > This transaction is structured so that 100% of Windsurf
| employees will participate financially. They will also have all
| vesting cliffs waived and will receive fully accelerated vesting
| for their work to date.
| asadotzler wrote:
| Not important, marketing speak unless it comes with numbers.
| "We'll split 100% of $10 across every employee" is just as much
| a possibility as the windfall their PR team has convinced you
| of.
| oytis wrote:
| So they will get stocks of a company that ceases to exist
| basically
| akavi wrote:
| Is this purely the rump company left over from the Google pseudo-
| acquistion? Or does this mean that deal fell through?
|
| Does this represent confirmation that there was no pro-rata
| compensation to common share holders in the Google deal?
|
| I just have _so many questions_.
| xnx wrote:
| And what is Google "paying $2.4 billion in license fees" to use
| Windsurf's technology for, and to who? Does Windsurf have any
| technology?
| mattlondon wrote:
| I suspect it is more a "licence" for the things in the
| staff's heads for those who were poached.
| whamlastxmas wrote:
| And this highlights why intellectual property is really
| gross to me
| mritchie712 wrote:
| not sure of windsurf's ToS, but Google could be after the
| usage data (e.g. did the user accept the suggested edit? if
| not, what did they change it to? etc.)
| lunarboy wrote:
| Windsurf founding team is already at Google
| neural_thing wrote:
| Galaxy brain move by cognition
| annodomini2019 wrote:
| What does this actually mean for the product? Huge fan of the
| plugin on Jetbrains products...
| k3nz0 wrote:
| Which plugin?
| annodomini2019 wrote:
| The Windsurf plugin!
| williamzeng0 wrote:
| Transparently I'm a founder building a plugin that's like
| "Cursor for JetBrains IDEs", if you're an windsurf user you
| might like us:
| https://plugins.jetbrains.com/plugin/26860-sweep-ai
| annodomini2019 wrote:
| How would you describe your stance towards security? I'm an
| enterprise user so it'd have to clear a high bar with our
| security team
| williamzeng0 wrote:
| I think the two big things are privacy mode on by default
| and zero data retention by default.
|
| No code or prompts are stored unless you opt-in. We also
| have on-prem deployment options but it's much more
| expensive.
| tibbydudeza wrote:
| What's left ???.
| chews wrote:
| the hosed employees that actually built a great product while
| their leadership sings "go on take the money and run" on their
| mega yacht.
| barbazoo wrote:
| Presumably the employees were compensated fairly for their
| work while they worked there?
| satvikpendem wrote:
| And they're also now compensated by the purchase by
| Cognition as post says
| asadotzler wrote:
| Why? Why presume that? These employees got screwed. They
| were left with a shell of a company that got bought for
| pennies on the dollar while their executives and executive
| pets all got massive payouts moving to Google. It was a
| total dick move and the result will be a flight from
| startups because who wants to bust their asses for an
| executive team that will leave them behind when the payout
| arrives.
| kevindamm wrote:
| The company was intact after key employees moved to Alphabet,
| and importantly there was a service contract to use Windsurf,
| so apparently Google will be paying Cognition, ultimately, now.
| xnx wrote:
| > there was a service contract to use Windsurf
|
| I wonder what the terms were there. Hard for me to imagine
| why Google would've included that in the deal.
| kevindamm wrote:
| I'm just speculating but you'd get to use the IP without
| needing to negotiate overmuch about it, if they're using
| GCP or can be retrofitted to then you could set prices at a
| discount but claim a market rate when discussing growth of
| usage, which is great at quarterly earnings report time..
| or even just as an ease-of-transition to expand into
| Windsurf's existing user base? There are plenty of reasons,
| including negotiation leverage, optics, or even just
| appeasment to the founders or board that the original
| project doesn't get immediately destroyed.
| _--__--__ wrote:
| The Devin name/branding is so toxic that nobody will try their
| current product offerings, so the hollowed out shell of a
| respected company is actually fine for their needs.
| consumer451 wrote:
| Users and enterprise contracts?
| jeanlucas wrote:
| This is so confusing
| makin wrote:
| I was a bit confused as to what "Cognition" was, but they're the
| makers of Devin (edit: that just got added to the title, for
| reference), so that makes sense. Just buying the competition, the
| only surprise is they had more money to spend than the big ones.
| handfuloflight wrote:
| As far as I recall they were first to market with the "AI
| software engineer" promise.
| brentm wrote:
| Well Google did also just pay $2.5B to license Windsurf in
| perpetuity. Cognition is probably spending a lot less than that
| for just whatever it left after that type of a deal. Remaining
| team members, etc.
| mkagenius wrote:
| > The acquisition includes Windsurf's IP, product, trademark
| and brand, and strong business.
|
| So, Google will be paying $2.5B to Devin guys?
| tedivm wrote:
| No, as some portion of the $2.5b goes to Windsurf
| investors.
|
| Basically, Google bought the top talent from the company.
| This cash was used (according to articles I read this
| morning) in part to pay directly out to shareholders, and
| in exchange Google got the top talent from the company and
| a license for the software (probably mostly so their new
| talent didn't have to worry about NDA, non-compete, and
| patent challenges).
|
| Since this money went to shareholders, not to the company
| bank, and since top talent fleeing the company reduces the
| value of the company the overall value of Windsurf likely
| went down as part of the Google deal. This in turn likely
| made it cheap enough for the remainder to be purchased by
| Cognition.
| xnx wrote:
| > Google did also just pay $2.5B to license Windsurf in
| perpetuity
|
| Could there have been a clause that made this invalid in case
| of acquisition?
| wmf wrote:
| IANAL but you'd have to be pretty dumb to include that
| clause.
| physix wrote:
| This looks to me like the smoking gun on a type of
| acquisition that circumvents regulatory oversight, primarily
| driven by the "need for speed":
|
| https://medium.com/@villispeaks/the-blitzhire-
| acquisition-e3...
|
| which I first saw here
|
| https://news.ycombinator.com/item?id=44553257
| DebtDeflation wrote:
| Circumvents regulatory oversight and also shafts 99% of the
| employees. Seems to be a backdoor way to acquire the key
| founders/leaders and IP (via a perpetual license) while
| leaving behind a desiccated husk of rank and file
| employees, customers, and obligations.
| bananapub wrote:
| it's super shitty by management to flee, but given that
| most startups fail, this startup maybe not-failing really
| isn't a "shafting".
| bix6 wrote:
| Can the new buyers revoke that license?
| amenghra wrote:
| "Had more money to spend" => it could be a little money and a
| large amount of stock.
| handfuloflight wrote:
| Had it been the reverse, they would have announced the
| purchase price.
| dgunay wrote:
| kind of funny that no one seems to know them by name, only by
| the infamously panned reception of their main product
| esafak wrote:
| One benefit of separating your brands from your company is
| you can try again without the stigma of your failures :)
| Aurornis wrote:
| > the only surprise is they had more money to spend than the
| big ones
|
| The sale price for Windsurf was likely significantly lower than
| the original acquisition plans.
|
| It didn't go to $0 like some predicted, but it was never going
| to be as valuable as it was before the executives bailed on it.
| htrp wrote:
| so devin gets the leftover remains of windsurf to fix their
| agentic AI ide that wasn't working in the first place?
| rvz wrote:
| yes.
| badgersnake wrote:
| So some VCs got rinsed for Google's leftovers.
| bananapub wrote:
| ok so it's not all bad then
| fortysixpercent wrote:
| VC's probably did fine. Their preferred shares get paid out
| on the dividend out of the Google 'license' fee. They might
| get some stock in Cognition as part of the acquisition of the
| remains of the company, but they've likely already been made
| whole and made a tidy profit on money invested in early
| rounds.
| krat0sprakhar wrote:
| Wait, so Google picks up the talent, and Devin picks up the
| brand/product? This is so confusing!
| TIPSIO wrote:
| I think it's safe to say don't use Windsurf. There are so many
| other options.
| bicx wrote:
| Unfortunately this seems to be true. I like Windsurf, but
| these days I just use it as a harness for running Claude Code
| while still retaining decent code completions.
| OldfieldFund wrote:
| Try Gemini CLI too. Free and I like it more than Claude
| Code.
| artificialLimbs wrote:
| How do you do the nice line-by-line (or section-by-
| section) before/after handling in a CLI tool?
| hobs wrote:
| It has an external editor option (which I havent tried)
| the cli interface by default is pretty bad for medium to
| large code changes.
| stickfigure wrote:
| Start with a clean git (even if you're just committing
| WIP locally). Run the tool. See the diffs in your IDE.
| They show up immediately in IntelliJ; use the "commit"
| pane. Same as if I had edited a bunch of files.
|
| Works fine.
| koakuma-chan wrote:
| This is the final fix. I'm confident this will resolve
| all the errors.
|
| [API Error: got status: INTERNAL.
| {"error":{"code":500,"message":"An internal error has
| occurred. Please retry or report in https://developers.ge
| nerativeai.google/guide/troubleshooting..."}}]```
| oytis wrote:
| The talent stays with Devin. Google has got the CEO. Not sure
| why they need a CEO, maybe Pichai wants to retire
| rvz wrote:
| Must have been acquired for an extreme discount far from the $3B
| offer from OpenAI and Windsurf's (alleged) valuation of $1.3BN.
|
| Cognition being worth $4B with Devin being raced to zero by
| Claude Code also undercutting both Windsurf and Cursor have a
| very steep hill to climb.
|
| Having both Devin and Windsurf will just make them raise more
| money as they burn through their operational costs.
| seatac76 wrote:
| Google already paid $2.4B out of the $3B OpenAI deal, to what I
| imagine is Cognition now. Cognition must have spent low 100s of
| Millions max.
| xnx wrote:
| > Google already paid $2.4B
|
| This is unclear. $2.4B was for licensing and compensation.
| Why would Google have agreed to pay any significant amount to
| the Windsurf leftovers?
| klohto wrote:
| Having been acquired by Google, there is always a leeway for the
| execs to take the employees with them. Google is a weak
| negotiator when they NEED something.
|
| On the other hand, I can imagine the execs taking Google golden
| handcuffs while trying to close the Cognition deal so the
| employees are made whole or maybe even on better terms than if
| they all went to Google.
| isodev wrote:
| I'm really confused now. Also, is there really that much of a
| transformative difference between Windsurf and say OpenAI/Claude
| etc to warrant this crazy valuations?
| xnx wrote:
| > crazy valuations
|
| I haven't seen anything to indicate what was paid for what's
| left of Windsurf.
| isodev wrote:
| I was also referring to the $2.5B Google paid. I can't
| imagine what could possibly be the value they're hoping to
| get
| xnx wrote:
| I'd love to learn more about that arrangement. Maybe
| Google's terms indicated that the "licensing fees" portion
| of "$2.4 billion in licensing fees and for compensation"
| are void if Windsurf gets acquired.
| brulard wrote:
| They got the top talent from there with the technology and
| they can continue on that or be used for other AI projects,
| right?
| guluarte wrote:
| I'm also confused why Devin is worth billions
| yoyohello13 wrote:
| For real. According to the marketing material. Couldn't Devon
| just whip up a windsurf competitor in minutes?
| iamleppert wrote:
| They are hiring software engineers! Just look at the
| careers page! hahahaha
| codingwagie wrote:
| the founder went to harvard, is basically the answer
| anticensor wrote:
| Devin's whole business model is predicated upon replacing
| programmers with minimum wage AI agents.
| guluarte wrote:
| That'll be cool only if Devin actually worked.
| citizenpaul wrote:
| That the generally unspoken business model for all ai
| products. How can we get rid of these annoying humans.
|
| Reminds me of of some quip where a doctor says to a
| resident. Yeah this job would be so cool if it wasn't for
| all these sick people.
| koakuma-chan wrote:
| Who decides for much a company is worth?
| alwinaugustin wrote:
| I use cursor
| seatac76 wrote:
| I hope Windsurf employees made some money in this whole
| kerfuffle. Would be terrible if they got left out of the payday.
| xnx wrote:
| The ones that went to Google did! I don't know if the remaining
| employees are getting anything out of this acquisition.
| bradly wrote:
| Very clearly called out in the article: > To
| that end, Jeff and I worked together to ensure that every
| single employee is treated with respect and well taken care of
| in this transaction. Specifically: > 100% of Windsurf
| employees will participate financially in this deal >
| 100% of Windsurf employees will have vesting cliffs waived for
| their work to date > 100% of Windsurf employees will
| receive fully accelerated vesting for their work to date
| asadotzler wrote:
| Not clearly called out. That call out is as clear as mud. We
| have no idea how much if any money the left behind employees
| will get and it's almost certainly far less than they would
| have got if their execs had held out for a deal that
| benefited everyone instead of their selfish and damaging to
| the entire startup ecosystem deal with Google.
| jspann wrote:
| > 100% of Windsurf employees will participate financially in this
| deal
|
| > 100% of Windsurf employees will have vesting cliffs waived for
| their work to date
|
| > 100% of Windsurf employees will receive fully accelerated
| vesting for their work to date
|
| This sounds like a happy ending for the employees of Windsurf and
| a good deal for Cognition
| xnx wrote:
| I'm not so sure. No telling what the purchase price was.
| handfuloflight wrote:
| Or how much of it is in Cognition stock.
| krasin wrote:
| > This sounds like a happy ending for the employees of Windsurf
| and a good deal for Cognition
|
| The employees were robbed from having a big cash exit. Illiquid
| stock options from Windsurf were converted to illiquid stock
| options of Devin.
|
| What's worse is that the well is now poisoned. I would advise
| against joining startups from now on, because I think that
| there's no upside for employees anymore.
| frankfrank13 wrote:
| I don't think so. If your shares dropped 90% overnight you
| wouldn't be excited to have your vesting cliff waived
| whamlastxmas wrote:
| Are the cliffs waived or accelerated? Makes me not trust this
| carimura wrote:
| "work to" is key.. sounds like they aren't fully accelerating,
| just accelerating the time they worked that hasn't vested. So
| if you were hired a week ago, you get a week's worth of
| participation.
| bravetraveler wrote:
| _" Devin's on first"_ just doesn't work the same
| vouaobrasil wrote:
| I wonder if we'll ever stop to ask ourselves if faster and faster
| output of software is actually a good thing for the world. Or
| will we just continue because it's just what we do nowadays in
| civilization to get ahead?
| mirkodrummer wrote:
| ahead of what? ahead of generating ugly and mostly usable masks
| over the same data. I'm in favor of AI but it seems to me that
| no one really stopped asking himself what real problems people
| have and how to actually fix them
| Imustaskforhelp wrote:
| I think so but not for the reason that you think.
|
| See, most closed source software really just pisses me off of
| ideological reasons, I just like to tinker with things and just
| having the _possibility_ to do so by being provided the source
| code really helps my mind feel happy I guess.
|
| So I "vibe coded" a game that I used to play and some projects
| that I was curious about and I just wanted to tinker too. sure
| the game and code have bugs.
|
| Also with the help of AI, I feel like I can tinker about things
| that I don't know too much about and get a decent distance
| ahead. You might think that I am an AI advocate by reading this
| comment, but quite the contrary, I personally think that this
| is the only positive quality that AI helped in quite
| substantially.
|
| But at what cost? The job market has sunk a large hole and
| nobody's hiring the junior devs because everybody feels better
| doing some AI deals than hiring junior devs.
|
| My hunch is that senior devs are extremely in demand and are
| paid decently and so will retire on average early too. Then,
| there would be a huge gap b/w senior and juniors, because
| nobody's hiring the junior engineers now, so who will become
| the senior engineers if nobody got hired in the first place. I
| really hope that most companies actually realize that the AI
| game is quite a funny game really, most companies are too
| invested into it to realize that really, open source AI will
| catch up and there is just no moat with AI and building with AI
| or just doing stuff with AI isn't that meaningfully significant
| as they think it is as shown by recent studies.
| gtsop wrote:
| > that senior devs are extremely in demand
|
| Is this true? I am not seeing salaries rising, the demand
| seems to be met. But maybe I'm wrong.
| Imustaskforhelp wrote:
| Sorry I guess, I may have been incorrect in that regards. I
| actually just meant as in comparison to juniors really. And
| I personally felt that way from what I've heard from all
| the people, I am not sure too about salary rising but still
| I always thought that seniors are getting on with more and
| more responsibility since juniors aren't getting hired and
| so I thought that they were more compensated and I am
| pretty sure that I heard it somewhere and I think I just
| repeated that.
|
| Also maybe I felt this way because of 100 Million $ and the
| 30 Billion $ acquisition by Zuckerberg I guess
|
| I might ask AI (Oh the irony) and here is the chat https://
| chatgpt.com/share/68756188-d374-8011-9f23-6860d6b1db... and
| here is one of the major source of this I suppose
|
| https://www.hackerrank.com/blog/senior-hiring-is-surging-
| wil...
|
| And I would like to quote a part from the hackerrank ie.
| Taken in isolation, this might suggest a cautious but
| healthy rebound. But viewed through a 2025 lens, a deeper
| pattern emerges: teams are leaning hard into experience,
| and leaving early-career talent behind.
| ecto wrote:
| A lot of people are asking that question, and the answer is
| emphatically yes. All improvements to the human condition are
| rooted in technology, and software is technology. Who's to say
| the latest advancements aren't some tech tree precursor to cure
| an ailment impacting millions - how could you argue against
| that? The genie is out of the bottle.
| vouaobrasil wrote:
| > how could you argue against that?
|
| I would argue against it if the downside is even more
| technological enslavement for billions.
|
| And while many improvements to the human condition are rooted
| in technology, many of the problems of humanity are rooted in
| it as well. There might very well be an optimal point that
| we've already past.
| xnx wrote:
| Sounds like one of those "Two turkeys don't make an eagle."
| situations.
| agigao wrote:
| Devin/Cognition?
|
| All right, cancelled.
| markbao wrote:
| Edit: nvm, see replies
| TZubiri wrote:
| I think google is buying windsurf, they are leaving 100% of
| assets and some employees, and windsurf is buying that 100m in
| assets + taking the leftover employee liability.
|
| Microsoft poached the talent, devin Co. Picks up the scraps
| hadlock wrote:
| "Acquiring" is often synonymous with "merger". Technically the
| surviving company acquires the other, but effectively it's a
| merger. Not always, but it's not uncommon to see two weaker
| companies merge in a competitive landscape to survive. It also
| counts as a liquidity event allowing employees some financial
| levers.
| muzz wrote:
| But these seem to be two well-funded companies? I.e. both
| with $100M+ funding within the last 12 months
| xnx wrote:
| > How does this transaction make sense?
|
| The fact that it doesn't make sense with those numbers almost
| surely indicates those numbers are misleading.
|
| > Google paid a $2.4 billion licensing fee
|
| This is the reported number for licensing and compensation, but
| who knows what the terms really were.
|
| > Cognition's valuation is $4 billion
|
| Doubtful
| john_moscow wrote:
| They probably got what got left of it in a cashless deal.
| Basically, the shareholders got to exchange X shares in a
| fatally wounded company into Y shares in a still-alive startup.
| The economic sense depends on the ratio between X and Y, but if
| the board was close to panicking due to recent events,
| Cognition probably got a good deal.
| aiCodeMonkey wrote:
| Uhh so where does the 2.4B go to? For the "licensing" rights but
| without equity to Windsurf? Does the whole 2.4B get distributed
| amongst the talent that Google acquired or is it shared amongst
| all Windsurf employees?
| asadotzler wrote:
| Windsurf employees left behind by their executives get none of
| that Google money. It went to the selfish exec team and a few
| top employees that abandoned their teams and projects for
| Google's cash, and what didn't go to those selfish jerks went
| to Windsurf's investors. The rank and file that were abandoned
| by their leadership got totally screwed. Startup executives
| will never again be trusted to deal fairly with the people who
| spend their opportunity trying to make that particular startup
| work rather than some other, or simply going to work for an
| incumbent. This deal probably did more damage to the tech
| startup ecosystem than anything I've seen in my 25 years in
| Silicon Valley.
| aiCodeMonkey wrote:
| did the team that joined deepmind forfeit their equity or
| will the cognition acquisition basically allow them to get a
| double payout from their equity?
| dang wrote:
| Recent and related:
|
| _OpenAI's Windsurf deal is off, and Windsurf's CEO is going to
| Google_ - https://news.ycombinator.com/item?id=44536988 - July
| 2025 (679 comments))
|
| _Attended Windsurf 's Build Night 18 hours before founders
| joined Google DeepMind_ -
| https://news.ycombinator.com/item?id=44539884 - July 2025 (1
| comment)
| jsemrau wrote:
| Cognition also works with Goldman Sachs now.
| amanleenp wrote:
| Wait, is this final? Has Cursor or Augment Code or the next big
| Coding Assistant made their offer already?
| sergiotapia wrote:
| I totally missed the puck with this one. There was a time where
| Cursor did not have the agent feel of a true AI pair-programming
| buddy. Windsurf had that magical aspect, and I totally thought
| they would destroy Cursor. But it took Cursor about 2 weeks by my
| recollection to add agent mode, and ultimately I went back to
| Cursor because of their better WSL2 integration.
|
| For those brief 2 weeks, Windsurf felt like the SOTA tool. Crazy
| how the winds change.
| servercobra wrote:
| Same experience. I was using Windsurf for a couple of weeks,
| but felt like the editor wasn't as nice to use as Cursor, so
| features an agent could handle went to Windsurf and pair coding
| was more with Cursor. Once Cursor got agent mode, I haven't
| really touched Windsurf.
|
| Feels like a new SOTA tool every couple weeks. Heck, the post
| below this is about a new agentic IDE.
| bluelightning2k wrote:
| As someone who stuck with it - it's good. And it's not
| actually just a thin wrapper. Their tab model is really,
| really good now (I think that was Cursor's big advantage for
| a long time). And they also price very fairly (read: heavily
| subsidized, minus Claude).
| _jab wrote:
| Let this be a learning lesson in judging these deals based on
| partial information. Kudos to the Google, Windsurf, and Cognition
| teams for keeping all of these deals under wraps until
| announcement (OpenAI could learn something...), but even so it's
| likely that we the public will never learn every detail of what
| transpired. I've seen a lot of harsh, misguided takes over the
| past few days, like that the Windsurf founders screwed over their
| employees, or that OpenAI reneged on the deal. In this case, this
| seems like a happy ending for all parties involved: congrats to
| the Windsurf team!
| objclxt wrote:
| > I've seen a lot of harsh, misguided takes over the past few
| days, like that the Windsurf founders screwed over their
| employees [...] In this case, this seems like a happy ending
| for all parties involved
|
| There is no evidence at all in the announcement that is the
| case. It just says "100% of Windsurf employees will participate
| financially in this deal". What "participate financially" looks
| like is not elaborated upon.
|
| It is possible you're right. It's also equally possible that
| the founders have still screwed over their employees, we just
| don't know. Nothing in this post supports either position.
| no_wizard wrote:
| >It is possible you're right. It's also equally possible that
| the founders have still screwed over their employees, we just
| don't know. Nothing in this post supports either position.
|
| In the lack of evidence, its okay to assume the most likely
| scenario, which is the executives & shareholders will make
| out like bandits and everyone else is likely to at best, get
| pennies.
| mring33621 wrote:
| pizza party
| akavi wrote:
| If my understanding is correct, this is still a much worse deal
| for employees than if Windsurf's exec team had negotiated a
| "standard" "accelerated vesting, common conversion" acquisition
| with Google.
|
| Presumably the "payout" from Cognition is at a lower nominal
| value and in illiquid (and IMO overvalued) shares in Cognition
| rather than cash.
| drew-y wrote:
| > OpenAI could learn something...
|
| Did OpenAI ever actually announce anything publicly regarding a
| potential windsurf acquisition?
|
| AFAICT most of the reporting was based on rumors or leaks. But
| they never actually announced an acquisition. Seems like
| Bloomberg may have made an oopsie here.
| BiggerChungus wrote:
| You're talking like the founders orchestrated this deal to
| cognition all along.
|
| that's absolutely not the case. they ejected and the remaining
| executive team dealt with the sale over the weekend.
| t0mas88 wrote:
| I can't imagine this deal was done over just the weekend. It
| takes time to set this up, check the financials etc.
| stefan_ wrote:
| > Kudos to the Google, Windsurf, and Cognition teams for
| keeping all of these deals under wraps until announcement
|
| Geez is the cognitive distortion field active again? Even Grok
| could figure this one out.
| conartist6 wrote:
| I hit myself in the head as hard as I could without causing
| permanent damage
| gtsop wrote:
| Care to explain? I am honestly clueless
| conartist6 wrote:
| I don't even remember anymore. I guess hitting myself in the
| head worked..?
|
| But in general my reason for hitting myself in the head is
| that I'm an IDE author and people keep tripping over
| themselves to place great value on forks of VSCode
| gsibble wrote:
| This is fantastic news. Especially the way they are structuring
| the equity payout.
| gigatexal wrote:
| Will the remaining employees not bought out and brought over to
| Microsoft get a windfall in this deal even if they're stakes
| haven't vested?
| ls_stats wrote:
| Isn't Devin AI basically a scam, selling an "AI Software
| Engineer" when no such thing exists.
| servercobra wrote:
| We're using it consistently to put out (albeit smaller)
| features.
| mindwok wrote:
| Any examples? Curious what you let it rip on and what it can
| actually do.
| Buttons840 wrote:
| Hello Cognition AI,
|
| My name is Devin; it has been for many decades now. I'm
| embarrassed to see you've named your product after me. It has
| already prompted uncomfortable jokes at my expense, and I'm sure
| there will be more. I now have newfound empathy for people named
| Alexa.
|
| For instance, people have made jokes about my name in interviews,
| and it's embarrassing for me, and thus awkward for everyone, and
| awkward interactions make it objectively less likely that I will
| get job offers.
|
| I don't think any product should be named after people. Please
| change the name of Devin.
| throwawaysleep wrote:
| Plenty of men would love to have their name be a euphemism for
| eroticism.
| handfuloflight wrote:
| Meanwhile, Claudes are getting ahead!
| bluelightning2k wrote:
| Reading this made me wish I hadn't named my son Windsurf
| OccamsMirror wrote:
| Apart from this news I haven't heard about Devin in a long
| time. Not since the very start of the AI hype. Considering how
| foolish a purchase this seems to be I don't think you're going
| to have to worry about them Bogarting your name for too much
| longer.
| kubb wrote:
| Unpopular, controversial take: there should be an LSP extension
| that lets CLI agents, like Claude Code show diffs in the editor,
| and also one for completions, and sending snippets back to the
| CLI.
|
| That, by itself, would obliterate the entire value of Windsurf or
| Cursor or whatever. The fact that Google has this kind of money
| and spends it on dubious "talent" (though none of these people
| are known in the community) is a testament to how overfunded tech
| companies are compared to the value that they provide.
| abletonlive wrote:
| "overfunded" is a weird way to talk about a tech company that
| is incredibly profitable.
| margalabargala wrote:
| Revenue is a funding source. Companies with too much money
| sometimes made really dumb decisions with that money.
|
| The fact that one division of Google is wildly profitable
| does not exempt other parts of the company from criticism of
| their financially dubious choices.
| abletonlive wrote:
| Net profit can't be used as a measure of both "funding" and
| "value generation" while saying that a company is
| "overfunded" because it doesn't provide enough "value".
| Come back to your senses.
| margalabargala wrote:
| I'm genuinely not sure if you're not understanding, or
| deliberately ignoring my point.
|
| I'll assume the former and try again. Maybe you didn't
| realize I'm not the person you originally replied to?
|
| If a company is profitable, they have funds. The funds
| generated by the profits, can be used to fund additional
| internal projects. If the bucket of funds from profits
| gets ridiculously large, then it may begin to be used for
| vanity projects, like gutting an AI company, or building
| a gold statue of the founder. It seems reasonable to call
| companies spending on mostly-useless excesses
| "overfunded".
| abletonlive wrote:
| I'm not misunderstanding anything. It's just that the
| idea of a massively profitable company being labeled
| "over-funded" when excess profit is used in a way that
| you find disagreeable is stupid. It doesn't matter how
| well they allocate their revenue.
|
| Stop looking at the entire world through the eyes of VC,
| because it doesn't work.
|
| You're not funding google by paying for youtube, you're
| buying a service.
|
| You didn't "overfund" your pizza shop that hired a
| stripper for friday night vibes, and neither did 99.99%
| of customers that paid google for their service
| offerings.
|
| You just bought a pizza. Put down the VC podcasts
| margalabargala wrote:
| Gotcha, you're just being mean. You've got a bone to pick
| with VCs, I guess, so you've declared I listen to VC
| podcasts, see the world like one, and am using a stupid
| idiom.
|
| That's fine. I'm going to continue referring to
| corporations that blow lots of money on random intra-
| industry dick measuring matches because they can as
| "overfunded", and you can continue expressing your
| opinion to anyone who will listen that this one person on
| the internet used an idiom that you think is dumb because
| it implies something other than "that person profited,
| therefore they did something right and therefore whatever
| they do with that money is correct and intelligent and
| never ever wasteful or dumb."
| djtango wrote:
| It's kind of their prerogative to spend their money how
| they like. If it's anti-competitive then you can hope
| that regulation exists to prevent that behaviour. As a
| shareholder you can complain that they will stop this
| value igniting behaviour. As an investor if you believe
| this behaviour is irrational you can short their stock
| and hope that the market is efficient and the share price
| will reflect the igniting value in their multiple.
|
| As a bystander and outsider it is hard to isolate the
| value igniting behaviour from the moonshot behaviour.
| Shareholders love to gut a business of its risk taking
| and excess behaviour for predictable and inflated margins
| (and dividends) but the past 20+ years of our megacap
| companies is that they have continued to "innovate" in
| spite of all their inefficiencies.
|
| I always have a chuckle when I recall how shareholders
| tried to oust Zuck for buying Instagram for 1B...
|
| These vanity hires do seem frothy and reminiscent of
| dotcom style behaviour. But "AI" clearly will be game
| changing much like the internet was, and who at this
| stage can say what is worth recruiting people at the
| forefront of commercialising the tech right now
| brulard wrote:
| It is known there were many developers without really much
| work to do that were hired only to be denied to competitors.
| Maybe it was cleaned up in the meantime
| cweld510 wrote:
| Big companies hired a lot, but I don't think this
| specifically is true? In theory a high-value engineer would
| be productive, or else they aren't worth stealing.
|
| The simpler explanation seems more correct here -- there
| was a lot of product fluff and a lot of headcount allocated
| to build that fluff.
| kubb wrote:
| It's fair to suggest a different word or phrasing, but you're
| coming off as hostile, not constructive.
| barbazoo wrote:
| > That, by itself, would obliterate the entire value of
| Windsurf or Cursor or whatever.
|
| Have used Cursor and I know that there is quite a bit of value
| between the model and the chat input box and it will be similar
| to Claude Code or Codex, it's what makes this agentic, it's
| just accessed through a different interface. So from that
| perspective, Cursor makes sense for folks that are already in
| the VSCode environment.
| brulard wrote:
| On the contrary, I'm already in the VSCode environment and I
| would hate to have to switch to Cursor. Doesn't matter that
| it is a fork, I don't want a fork for every extension of my
| workflow. I used Cline and now Claude code integrated to
| VSCode, and I don't think I'm missing much by not switching
| to Cursor.
| Myrmornis wrote:
| I symlinked my vscode settings into the cursor config
| directory and the transition was strictly additive;
| everything worked exactly the same as before, with two
| exceptions so far: a .NET extension wasn't supported, and
| Cursor recently forced a switch to their own version of
| Pyright (but that seemed like an improvement once the type
| checker diagnostics were tamed a little).
| Maxious wrote:
| > Cursor recently forced a switch to their own version of
| Pyright
|
| Microsoft forced Cursor to stop using their versions of
| various plugins https://forum.cursor.com/t/the-c-dev-kit-
| extension/76226/18
| retinaros wrote:
| Windsurf is the first company that moved from IDE to training
| and trained good models. Unfortunately in code good models are
| not enough to win against claude 4. Any wrapper constraining
| the model is also doomed to fail.
| d1egoaz wrote:
| This already exists via MCP
|
| > For other IDEs: The protocol is editor-agnostic. Any editor
| that can run a WebSocket server and implement the MCP tools can
| integrate with Claude Code.
|
| https://github.com/anthropics/claude-code/issues/1234
| https://github.com/coder/claudecode.nvim/blob/da78309eaa2ca2...
|
| Example in Emacs, this is how I use claude-code:
| https://github.com/manzaltu/claude-code-ide.el
| kubb wrote:
| This is great!
| joe_the_user wrote:
| _Unpopular, controversial take..._
|
| Could you please avoid juicing a random comment this way?
| HenriNext wrote:
| Claude Code can already show diffs in JetBrains IDEs and VSCode
| ('/ide' command connects the CLI/TUI to plugin/extension
| running in the IDE-side).
|
| It can also access the IDEs' real-time errors and warnings, not
| just compile output ('ideDiagnostics' tool), see your active
| editor selection, cursor position, etc.
| cbsmith wrote:
| Except the Windsurf team is already moving in that direction...
| csomar wrote:
| There is MCP-LSP and Context7.
|
| I use Rust and found it's better to let the AI hallucinate
| function names, then let the compiler correct them. Rust's
| compiler is significantly better than TypeScript's at this, so
| it works well.
| bananapub wrote:
| > there should be an LSP extension that lets CLI agents, like
| Claude Code show diffs in the editor, and also one for
| completions, and sending snippets back to the CLI.
|
| aren't you reviewing diffs in whatever diff tool you like? I
| find magit to be superlative for this (and for correcting and
| committing things).
| closeparen wrote:
| There should be an LSP integration that lets Cursor look up
| symbols and definitions the same way I do, instead of trying
| and failing to use grep / its fuzzy vector index thing!
| cshores wrote:
| [flagged]
| m3kw9 wrote:
| To be fair OpenAI didn't screw windsurf yet. Or did they
| cshores wrote:
| Windsurf screwed OpenAI from the sound of it.
| tomhow wrote:
| Could you please stop posting unsubstantive comments and
| flamebait? You've unfortunately been doing it repeatedly. It's
| not what this site is for, and destroys what it is for.
|
| If you wouldn't mind reviewing
| https://news.ycombinator.com/newsguidelines.html and taking the
| intended spirit of the site more to heart, we'd be grateful.
| 827a wrote:
| Does anyone actually use Windsurf? I know a ton of people on
| Cursor, Cline, Roo, Claude Code... but zero people in my
| engineering circles have even mentioned trying Windsurf.
| herval wrote:
| For me it was substantially better than Cursor. Their RAG/code
| indexing/whatever implementation is better (Cursor seems to
| completely fall apart on larger codebases, unless you keep a
| very detailed cursorrules file). The cmd+tab was also
| substantially better. Plus it's cheaper than using Cline.
|
| But with all this changing of hands, I'm not sure I can trust
| it going forward at all, so I guess it's back to looking for
| alternatives.
| thenaturalist wrote:
| It has been my go to IDE over all others.
|
| They had released their own model which was free and good
| enough a couple of weeks back.
|
| Obviously will need to look for alternatives.
| lqstuart wrote:
| I tried it once and couldn't understand why it exists. Neither
| windsurf nor cursor seem to offer anything Cline doesn't, and
| the real Microsoft developed tools like Pylance are also broken
| and can't be replaced with shitty AI.
| pplante wrote:
| I was using Windsurf in Pycharm, until I switched to Claude
| Code / Gemini CLI last week. I am also finding that Copilot
| with Sonnet 4 is pretty on par to Windsurf.
| lqstuart wrote:
| Windsurf already had sold their code and most of their devs to
| DeepMind. The company is worthless, idk what Devin thinks they're
| buying.
| thenaturalist wrote:
| Clearly you are more informed wrt to remaining IP and talent
| than the CEO of Devin.
|
| Clearly.
| kamhh94 wrote:
| What a thoughtfully written letter. You have to respect great
| leaders when they communicate in this eloquent, respectful
| manner.
| pm90 wrote:
| I think the amount of turmoil around these deals is giving more
| weight to the possibility that we're in a massive bubble thats
| quite divorced from any kind of fundamentals. Sooner or later the
| bubbles gonna burst.
| ch4s3 wrote:
| Yeah, I wonder if there are parallels to server-less tools of a
| few years ago.
| yomismoaqui wrote:
| Remember that the web also had a bubble that popped and look at
| where are we now with Google, Amazon, Meta...
|
| I think that there is a bubble but it's shaped more like the
| web bubble and less like the crypto bubble.
| theappsecguy wrote:
| "Web" is such a broad category. Quite a leap from LLM
| wrappers.
| joe_the_user wrote:
| Well, LLMs are themselves very broad. They encompass
| everything from web search to everything that you could
| automate yourself but don't have the time.
|
| I don't LLM capacities have to reach human-equivalent for
| their uses to multiply for years to come.
|
| I don't LLM technology as it exists can reach AGI by the
| simple addition of more compute power and moreover, I don't
| think adding computer necessarily is going to provide
| proportionate benefit (indeed, someone pointed-out that the
| current talent race acknowledges that brute-force has
| likely had it's day and some other "magic" is needed.
| Unlike brute-force, technical advances can't be summoned at
| will).
| Terr_ wrote:
| > Well, LLMs are themselves very broad.
|
| I think overstating their broad-ness is core to the hype-
| cycle going on. Everyone wants to believe--or wants a
| _buyer_ to believe--that a machine which can _grow
| documents about_ X is just as good (and reliable) as
| actually creating X.
| sebastiennight wrote:
| Since APIs exist (including APIs that allow you to get a
| human to execute the task), a machine which can grow
| specs about X is able to create real-world X in many,
| many situations.
|
| A machine which can define a valid CAD document can get
| the actual product built (even if the building requires
| manual assembly).
| ACCount36 wrote:
| "Brute force" is only held back by economics and hardware
| limitations.
|
| There are still massive gains to be had from scaling up -
| but frontier training runs have converged on "about the
| largest model that we can fit into our existing hardware
| for training and inference". Going bigger than that comes
| with non-linear cost increases. The next generations of
| AI hardware are expected to push that envelope.
|
| The reason why major AI companies prioritize things like
| reasoning modes and RLVR over scaling the base models up
| is that reasoning and RLVR give real world performance
| gains cheaper and faster. Once scaling up becomes
| cheaper, or once the gains you can squeeze out of RLVR
| deplete, they'll get back to scaling up once again.
| mort96 wrote:
| LLMs don't seem very broad. You're literally just talking
| about predictive text engines.
| macNchz wrote:
| As with any investing there's a risk appetite/timescale
| component to thinking about this stuff. Lots of companies
| went to zero in the dot-com bubble. Even Amazon was down over
| 90% between the end of 1999 and late 2001, and took until
| 2007 to recover to its high. NASDAQ overall took 15 years to
| return to its March 2000 high. Some incredible returns to be
| had if you waited it all out, to be sure, but it's hard to
| know what the interim looks like.
| broast wrote:
| It's taken Cisco 25 years to recover
| pqtyw wrote:
| Intel never recovered. Well they did if you count
| dividends but still..
| Yizahi wrote:
| Yeah, only those evolved a lot from the initial products
| everyone hyped and products people hyped in 2000 are extinct
| or free. And I still don't understand where Facebook makes
| money. :)
|
| Regarding LLMs there are two concerns - current products
| don't have any killer feature to lock in customers, so people
| can easily jump ship. And diminishing returns, if there won't
| be a clear progress with models, then free/small, maybe even
| local models will fill most of people needs.
|
| People are speculating that even OAI is burning more money
| than they make, it's hard to say what will happen if customer
| churn will increase. Like for example me - I never paid for
| LLMs specifically, and didn't use them in any major way, but
| I used free Claude for testing how it works, maybe
| incorporating in the workflow. I may transitioned to the paid
| tier in the future. But recently someone noted that Google
| cloud storage includes "free" Gemini Pro and I've switched to
| it, because why not, I'm already paying for the storage part.
| And there was nothing keeping me with Anthropic. Actually
| that name alone is revolting imo. I wrote this as an example
| that when monsters like Google or Microsoft or Apple would
| start bundling their solutions (and advertise them properly,
| unlike Google), then specialized companies including OAI will
| feel very very bad, with their insane expenses and
| investments.
| jahewson wrote:
| You don't understand how the world's 5th largest company by
| market cap makes money and this is evidence of...
| something?
| Yizahi wrote:
| That was a joke, mostly unrelated to the main point -
| about LLM corporations' finances.
| andruby wrote:
| > And I still don't understand where Facebook makes money.
| :)
|
| If that's a genuine question: Facebooks sells ads,
| information and influence (eg. to political parties). It's
| a very profitable enterprise. In 2024 Meta made $164B in
| revenue, and they're still growing at ~16% year-over-year.
|
| [0] https://investor.atmeta.com/investor-news/press-
| release-deta...
| SJC_Hacker wrote:
| > And I still don't understand where Facebook makes money.
| :)
|
| Its Meta now, and they own alot of "brands" besides
| Facebook. Instagram, WhatsApp, Oculus, Giphy, etc.
| meta_ai_x wrote:
| The dot-com was a bubble because investors pulled money and
| belief at the first sign of trouble.
|
| The landscape has changed dramatically now. Investors and VCs
| have learnt if we stick with winners and growth companies, the
| payoffs are massive.
|
| We also have more automatic, retail and foreign money flowing
| into the market. Buy the dip is a phenomenon that didn't exist
| at the scale it is now.
|
| Pre-2015 if Big Money pulled out, the market was guaranteed to
| fail, but now retailers sometimes have longer views and belief
| (on people like Musk, Altman) than institutions and they
| continue to prop it.
|
| So, it's foolish to apply 2000 parallels to now. Yes, history
| repeats, but doesn't with the exact time or price points
| shortrounddev2 wrote:
| > Investors and VCs have learnt
|
| lol. Investors and VCs have no idea what they're doing
| meta_ai_x wrote:
| lol is a coping mechanism for the poor. If you really think
| top VCs / investors haven't learnt the long-term importance
| of staying the course, then you know nothing about the
| industry and mostly being influenced by popular social
| media posts shitting on the investor class.
|
| There is a reason Anthropic/OpenAI and many startups are
| given much much longer ropes to be profitable than in the
| 2000 era when VCs pulled the rug the first opportunity of
| trouble
| shortrounddev2 wrote:
| If VCs knew what they were doing, they'd have real jobs
| meta_ai_x wrote:
| There are always shitty 20% operators in every industry.
| They won't make money and get weeded out.
|
| Delusional to apply this to top operators (and at the
| same breath complain about Rich getting Richer)
| shortrounddev2 wrote:
| I have yet to be pleasantly surprised by the alleged
| collective wisdom of Wallstreet. I would hope that you
| are right, and that our corporate masters are smarter
| than I give them credit for, but I'm not going to hold my
| breath
| handfuloflight wrote:
| Allocating capital might be the "realest" job in
| capital...ism.
| sealeck wrote:
| The thing that was most disillusioning for me here was
| SVB -- failure to apply basic principles of banking (i.e.
| they never really had a plan for central bank interest
| rates to change more than +-1%). Not just that the VC
| types running a bank weren't able to do so, but that such
| a large number of tech companies held all their cash on
| hand in a bank account (and didn't deposit anything in
| another bank, or a money-market fund/t-bills).
| asadotzler wrote:
| It is foolish to compare to the dot com boom and bust. At
| least when that bubble burst we still had the global
| broadband internet that it built. When this bubble bursts,
| we'll have next to nothing to show for it.
| sealeck wrote:
| We will have a mountain of GPUs!
| ghc wrote:
| Nothing except massive data centers full of GPU compute
| resources paid for by VC money. Wait, that's actually
| pretty similar...
| fnord77 wrote:
| gpus go obsolete faster than fiber backbone equipment
| ghc wrote:
| Do they? I figured each speed increase requires new
| optical equipment, but I guess I was just making
| assumptions.
| threetonesun wrote:
| I'm starting to think that making a bunch of tech
| companies the most valuable companies on Earth, and tying
| their value to everyone's ability to retire so the number
| must always go up was perhaps not the wisest thing to
| have done.
| rightbyte wrote:
| They could close shop and you could print the money and
| give to the retirements fonds and everyone would be
| better off. Maybe Apple would be missed.
| silentsea90 wrote:
| We have AI, a marvel that might change the arc of humanity
| and an epoch in our timeline. Fire, wheel etc. and AI.
| namesbc wrote:
| I'll choose the wheel over using a country's worth of
| electricity to parrot unusable AI slop to gullible fools.
| silentsea90 wrote:
| Is AI not useful to you? I've sped up my SWE work
| significantly (10x). Not sure why the cynicism.
| SJC_Hacker wrote:
| If you're just talking about SWE work, thats only one
| segment of an economy and is the "virtual world". But
| humans have to live in the real world.
|
| I believe the true revolution is going to be when AI can
| start living / interacting with the physical world.
| Driverless cars might be the start here.
| alfalfasprout wrote:
| OP didn't reference the dot-com bubble though...
| cakeface wrote:
| dot-com bubble companies were not good companies. They either
| built something that was not novel so it could be copied, or
| had insufficient value to monetize. We'll see the same with
| current AI.
|
| Similar to the invention of the web, AI is not a bubble. Real
| value has been created.
| ACCount36 wrote:
| Cisco was the quintessential dot-com bubble company. Back
| then, it was what Nvidia is today: at the very spearhead of
| investors rallying behind the Internet.
|
| "Good company" is subjective, but to argue that the company
| that built the backbone of modern web didn't make anything
| novel or monetizable is a bit short-sighted, don't you
| find?
| rsynnott wrote:
| And if you'd invested in Cisco then, it would have gone
| very badly for you. It was _wildly_ overvalued; at peak
| it had a P/E ratio of ~200 (even Nvidia's only about 50).
| NewLogic wrote:
| > not novel so it could be copied
|
| AI Agents can't be copied in a race to the bottom market to
| resell inference compute?
| qwytw wrote:
| Also there are no early IPOs. Very few people can buy stocks
| in these companies which changes the dynamics significantly.
| Note sure what's the point of talking about the stock market
| this much when for almost everyone the only way to get any
| exposureis through Nvidia or other hardware companies and
| maybe MS/Google/AWS.
|
| > Investors and VCs have learnt if we stick with winners and
| growth companies, the payoffs are massive.
|
| Well... yes and no. 2021 wasn't that long ago.
|
| > So, it's foolish to apply 2000 parallels to now
|
| The stock market and other financial stuff is of course
| different. The fundamental trend not necessarily though. It
| took awhile for anyone to figure out how to directly build a
| highly profitable internet based business back then for AI it
| seems more or less the same so far.
| wmf wrote:
| How about that Anthropic revenue though.
| burnte wrote:
| I've begun to think some bubbles are good for the economy
| overall. In the dotcom days anyone with an idea and a domain
| name could get funding. I myself worked for a company that
| nabbed 7x more funding than needed but still failed due to poor
| leadership. I had reservations about the founder but thought I
| could help drive things, but he was even more absent than I
| ever anticipated.
|
| A lot of VCs and PEs lost a lot of money during the crash. This
| means a lot of capital was spent in the economy, generating a
| lot of good activity, and the companies that failed then also
| put a lot more capital back into the economy through
| bankruptcies. Other businesses can pick up talent, IP, and
| assets for cheap, and everyone can learn from the failures.
| While losing that money isn't great for VCs, what they got was
| a very valuable education to be better stewards of their
| investments, and pick better companies. The next rounds of
| companies have to hit metrics, milestones, have to prove their
| value, etc.
|
| Never waste a perfectly good crisis: learn if nothing else.
| NewLogic wrote:
| Good point, it transfers capital from the investor class to
| the working class.
| nikcub wrote:
| > divorced from any kind of fundamentals
|
| Anthropic ARR went $1B -> $4B in the first half of this year.
| They're getting my $200 a month and it's easily the best money
| I spend. There's definitely something there.
| benjaminwootton wrote:
| I've always dwelled over $5 a month subscriptions for iPhone
| apps due to subscription fatigue. I find myself signing up
| for $200 AI subscriptions without a moments hesitation.
| smith7018 wrote:
| I hope both of you know that you're in the extreme
| minority, right?
| jarredkenny wrote:
| A very productive minority.
| BolexNOLA wrote:
| Have we seen any examples of any of these companies
| turning a profit yet even at $200+/mo? My understanding
| is that most, if not all, are still deeply in the red.
| Please feel free to correct me (not sarcastic - being
| genuine).
|
| If that is the case at some point the music is going to
| stop and they will either perish or they will have to
| crank up their subscription costs.
| jarredkenny wrote:
| I am absolutely benefitting from them subsidizing my
| usage to give me Claude Code at $200/month. However, even
| if they 10x the price its still going to be worth it for
| me personally.
| BolexNOLA wrote:
| I totally get that but that's not really what I asked/am
| driving at. Though I certainly question how many people
| are willing to spend $2k/mo on this. I think it's pretty
| hard for most folks to justify basically a mortgage for
| an AI tool.
| jarredkenny wrote:
| My napkin math is that I can now accomplish 10x more in a
| day than I could even one year ago, which means I don't
| need to hire nearly as many engineers, and I still come
| out ahead.
|
| I use claude code exclusively for the initial version of
| all new features, then I review and iterate. With the Max
| plan I can have many of these loops going concurrently in
| git worktrees. I even built a little script to make the
| workflow better: http://github.com/jarredkenny/cf
| BolexNOLA wrote:
| Again I understand and I don't doubt you're getting
| insane value out of it but if they believed people would
| spend $2000 a month for it they would be charging $2000 a
| month, not 1/10th of that, which is undoubtedly not
| generating a profit.
|
| As I said above, I don't think a single AI company is
| remotely in the black yet. They are driven by speculation
| and investment and they need to figure out real quick how
| they're going to survive when that money dries up. People
| are not going to fork out 24k a year for these tools. I
| don't think they'll spend even $10k. People scoff at
| paying $70+ for internet, a thing we all use basically
| all the time.
|
| I have found it rather odd that they have targeted
| individual consumers for the most part. These all seem
| like enterprise solutions that need to charge large sums
| and target large companies tbh. My guess is a lot of them
| think it will get cheaper and easier to provide the same
| level of service and that they won't have to make such
| dramatic increases in their pricing. Time will tell, but
| I'm skeptical
| nl wrote:
| > As I said above, I don't think a single AI company is
| remotely in the black yet.
|
| As I note above, Anthropic probably is in the black. $4B
| ARR, and spending less than $100M on training models.
| BolexNOLA wrote:
| It looks like their revenue has indeed increased
| dramatically this year but I can't find anything saying
| they're profitable, which I assume they'd be loudly
| proclaiming if it had happened. That being said looking
| at the charts in some of these articles it looks like
| they might pull it off! I need to look more closely at
| their pricing model, I wonder what they're doing
| differently
| lelanthran wrote:
| > My napkin math is that I can now accomplish 10x more in
| a day than I could even one year ago, which means I don't
| need to hire nearly as many engineers, and I still come
| out ahead.
|
| The only answer that matters is the one to the question
| "how much more are you making per month from your $200/m
| spend?"
| jarredkenny wrote:
| In terms of revenue for my startup, plenty more.
| tomjakubowski wrote:
| I'm curious, how are you accounting this? Does the
| productivity improvement from Claude's product let you
| get your work done faster, which buys you more free time?
| Does it earn you additional income, presumably to the
| tune of somewhere north of $2k/month?
| nl wrote:
| It's possible Anthropic is cash-flow positive now.
|
| Claude 3.7 Sonnet supposedly cost "a few tens of millions
| of dollars"[1], and they recently hit $4B ARR[2].
|
| Those numbers seem to give a fair bit of room for
| salaries, and it would be surprising if there wasn't a
| sustainable business in there.
|
| [1] https://techcrunch.com/2025/02/25/anthropics-latest-
| flagship...
|
| [2] https://www.theinformation.com/articles/anthropic-
| revenue-hi...
| joks wrote:
| Cost to train and cost to operate are two very different
| things
| acmj wrote:
| Are there studies to show those paying $200/month to
| openai/claude are more productive?
| jfim wrote:
| Anecdotally, I can take on and complete the side projects
| I've always wanted to do but didn't due to the large
| amounts of yak shaving or unfamiliarity with parts of the
| stack. It's the difference between "hey wouldn't it be
| cool to have a Monte Carlo simulator for retirement
| planning with multidimensional search for the safe
| withdrawal rate depending on savings rate, age of
| retirement, and other assumptions" and doing it in an
| afternoon with some prompts.
| OccamsMirror wrote:
| For curiosity, how complex are these side projects? My
| experience is that Claude Code can absolutely nail simple
| apps. But as the complexity increases it seems to lose
| its ability to work through things without having to burn
| tokens on constantly reminding it of the patterns it
| needs to follow. At the very least it diminishes the
| enjoyment of it.
| ido wrote:
| Simple apps are the majority of use-cases though - to me
| this feels like what programming/using a computer should
| have been all along: if I want to do something I'm
| curious about I just try with Claude whereas in the past
| I'd mostly be too lazy/tired to program after hours in my
| free time (even though my programming ability exceed
| Claude's).
| OccamsMirror wrote:
| Well that's why I'm curious. I've been reading a lot of
| people talking about how the Max plan has 100x their
| productivity and they're getting a ton of value out of
| Claude Code. I too have had moments where Claude Code did
| amazing things for me. But I find myself in a bit of a
| valley of despair at the moment as I'm trying to force it
| to do things I'm finding out that it's not good at.
|
| I'm just worried that I'm doing it wrong.
| resize2996 wrote:
| This has nothing to do with AI, but might help: All
| complex software programs are compositions of simpler
| programs.
| radley wrote:
| It's subjective, but the high monthly fee would suggest
| so. At the very least, they're getting an experience that
| those without are not.
| grogenaut wrote:
| I work at an Amazon subsidiary so I kinda have unlimited
| gpu budgets. I agree with siblings, I'm working on 5 side
| projects I have wanted to do as a framework lead for 7
| years. I do them in my meetings. None of them are taking
| production traffic from customers, they're all nice to
| haves for developers. These tools have dropped the costs
| of building these tools massively. It's yet to be seen if
| they'll also make maintaining them the same, or spinning
| back up on them. But given AI built several of them in a
| few hours I'm less worried about that cost than I was a
| year ago (and not building them).
| christina97 wrote:
| The point is that if a minority is prepared to pay $200
| per month, then what is the majority prepared to pay? I
| also don't think this is _such_ an extreme priority, I
| also know multiple people in real life with these kinds
| of selections.
| jrflowers wrote:
| >if a minority is prepared to pay $200 per month, then
| what is the majority prepared to pay?
|
| Nothing. Most people will not pay for a chat bot unless
| forced to by cramming it into software that they already
| have to use
| bicx wrote:
| It's a generic chat LLM product, but ChatGPT now has over
| 20 million paid subscribers.
| https://www.theverge.com/openai/640894/chatgpt-has-
| hit-20-mi...
| sgt wrote:
| So $415m revenue per month, annualized $5 billion / yr.
| Let's say we use a revenue multiple of 4x, that means
| OpenAI should be valued at $20 billion USD just based on
| this. Then one obviously has several other factors, given
| the nature of OpenAI and future potential. Maybe 10x
| more.
|
| Which puts the current valuations I've heard pretty much
| in the right ballpark. Crazy, but it could make sense.
| swat535 wrote:
| Forget chat bots, most people will not pay for Software,
| period.
|
| This is _especially_ true for developers in general,
| which is very ironic considering how our livelihood is
| dependent on Software.
| oytis wrote:
| Yeah, cause we want to be in control of software,
| understandably. It's hard to charge for software users
| have full control of - except for donations. That's #1
| reason for me to not use any gen AI at the moment - I'm
| keeping an eye on when (if) open-weight models become
| useful on consumer hardware though.
| ac29 wrote:
| > Forget chat bots, most people will not pay for
| Software, period.
|
| Apple says their App Store did $53B in "digital goods and
| services" the US alone last year. Thats not 100%
| software, but its definitely more than 0%
| SJC_Hacker wrote:
| Games are a big exception here, as is anything in the app
| store.
|
| But productivity software in general, only a few large
| companies seem to be able to get away with it. The Office
| Suite, CRM such as SalesForce.
|
| In the graphics world, Maya and 3DS Max. Adobe has been
| holding on.
| wrsh07 wrote:
| Yes, but that doesn't mean they aren't finding real value
|
| The challenge with the bubble/not bubble framing is the
| question of long term value.
|
| If the labs stopped spending money today, they would
| recoup their costs. Quickly.
|
| There are possible risks (could prices go to zero because
| of a loss leader?), but I think anthropic and OpenAI are
| both sufficiently differentiated that they would be
| profitable/extremely successful companies by all accounts
| if they stopped spending today.
|
| So the question is: at what point does any of this stop
| being true?
| Graphon1 wrote:
| > I think anthropic and OpenAI are both sufficiently
| differentiated that they would be profitable/extremely
| successful companies by all accounts if they stopped
| spending today.
|
| Maybe. But that would probably be temporary. The market
| is sufficiently dynamic that any advantages they have
| right now, probably isn't stable defensible longer term.
| Hence the need to keep spending. But what do I know? I'm
| not a VC.
| bicx wrote:
| Are there available numbers to support this? Software
| engineering in the U.S. is well-compensated. $200/mo is a
| small amount to pay if it makes a big difference in
| productivity.
| benburleson wrote:
| Which raises the question: If the productivity gains are
| realized by the employer, is the employer not paying this
| subscription?
| unshavedyak wrote:
| My day job in talks to do that. I'm partly responsible
| for that decision, and i'm using my personal $200/m plan
| to test the idea.
|
| My assessment so far is that it is well worth it, but
| only if you're invested in using the tool correctly. It
| can cause as much harm as it can increase productivity
| and i'm quite fearful of how we'll handle this at day-
| job.
|
| I also think it's worth saying that imo, this is a very
| different fear than what drives "butts in seats"
| arguments. Ie i'm not worried that $Company will not get
| their value out of the Engineer and instead the bot will
| do the work for them. I'm concerned that Engineer will
| use the tool poorly and cause more work for reviewers
| having to deal with high LOC.
|
| Reviews are difficult and "AI" provides a quick path to
| slop. I've found my $200 well worth it, but the #1
| difficulty i've had is not getting features to work, but
| in getting the output to be scalable and maintainable
| code.
|
| Sidenote, one of the things i've found most productive is
| deterministic tooling wrapping the LLM. Eg robust linters
| like Rust Clippy set to automatically run after Claude
| Code (via hooks) helps bend the LLM away from many bad
| patterns. It's far from perfect of course, but it's the
| thing i think we need most atm. Determinism around the
| spaghetti-chaos-monkeys.
| joks wrote:
| Perceived productivity or actual productivity?
| bakugo wrote:
| A fool and his money are soon parted.
| OtherShrezzing wrote:
| What do you do with $200/mo subscription to Anthropic? I'd
| consider myself a power user and I've never come close to a
| rate limit on the $20 subscription.
| Implicated wrote:
| If you're using Claude Code with any regularity then the
| $200/m plan is better than a Costco membership in value.
| lumost wrote:
| Anecdotally, usage rises precipitously when you are
| building a system from scratch with unlimited ai access.
| crazylogger wrote:
| Depends a lot on the way people use them.
|
| If you discusses a plan with CC well upfront, covering
| all integration points where things might go off rail,
| perhaps checkpoint the plan in a file then start a fresh
| CC session for coding, then CC is usually going to one
| shot a 2k-LoC feature uninterrupted, which is very token
| efficient.
|
| If the plan is not crystal clear, people end up arguing
| with CC over this and that. Token usage will be bad.
| vonnik wrote:
| I personally find gemini 2.5 pro and o4.1 mini to handle
| complexity better than claude code. i was a power user of
| claude code for a couple months but its bias to action
| repeatedly led me down the wrong path. what am i missing?
| OccamsMirror wrote:
| I'm finding myself agreeing with you... After also being
| a Max plan power user.
|
| Now I just find myself exasperated at its choices and
| constant forgetfulness.
| rtcoms wrote:
| how do you integrate that with a code editor ?
| ironmagma wrote:
| Or so you think..
|
| [1] https://metr.org/blog/2025-07-10-early-2025-ai-
| experienced-o...
|
| [2] https://futurism.com/companies-fixing-ai-replacement-
| mistake...
| d3m0t3p wrote:
| Your first link is (in my opinion) highly biased in the
| samples they choose, they hired maintainers from open-
| source repos (people with multi years of experience, on
| their specific repo).
|
| So indeed, IF you are in that case: Many years on the same
| project with multiple years experience then it is not
| usefull, otherwise it might be. This means it might be
| usefull for junior and for experienced devs who are
| switching projects. It is a tool like any other, indeed if
| you have a workflow that you optimized through years of
| usage it won't help.
| fsndz wrote:
| Exactly. I think the study is a good reminder that we
| really have to be careful about the productivity gains
| attributed to AI. Main takeaway imo, despite limitations
| from the study, is AI is not a panacea, it can increase
| productivity, but only if used 'well' and with the good
| workflows in place, and in the right context.
| bakugo wrote:
| > This means it might be usefull for junior and for
| experienced devs who are switching projects.
|
| In other words: it might be useful for people who don't
| understand the generated code well enough to know that
| it's incorrect or unmaintainable.
| fsndz wrote:
| I mean, hacker news is still the same aren't they using AI
| to completely make this website more of whatever it was
| before ????
| teruakohatu wrote:
| > Or so you think.. > [1]
| https://metr.org/blog/2025-07-10-early-2025-ai-
| experienced-o...
|
| You are welcomed to your point of view, but for me while
| one agent is finding an obscure bug, I have another agent
| optimising or refactoring, while I am working on something
| else. Its hard to believe I am deluded in thinking I am
| spending more time on a task.
|
| I think the research does highlight that training is
| important. I don't throws devs agents and expect them to be
| productive.
| hugs wrote:
| I'm easily getting $10K/month of value from my Anthropic
| subscription. (Rough estimate of how much I would have paid
| someone else to create the things I've (co)created with
| Claude Code so far.) If this is a bubble, I just hope I can
| finish all the projects I want to finish before it pops (or
| before they raise their prices to $9K/month because they read
| this comment.)
| fsndz wrote:
| and people are still saying vibe coding is overrated?
| nonsense: https://www.lycee.ai/blog/why-vibe-coding-is-
| overrated
| bakugo wrote:
| > I'm easily getting $10K/month of value from my Anthropic
| subscription.
|
| Are those things created by Claude actually making you that
| much in real money every month? Because the amount of money
| it would cost to pay someone to create something, and the
| value that something brings to you once it's made are
| largely unrelated.
| hugs wrote:
| They are tools I want/need for my business (like creating
| software libraries for various things). My $10K number is
| how much I would have paid a contractor in the past to
| code it for me.
| lelanthran wrote:
| > I'm easily getting $10K/month of value from my
| Anthropic subscription. (Rough estimate of how much I
| would have paid someone else to create the things I've
| (co)created with Claude Code so far.)
|
| I know it's hard to place a value on how much a utility
| saves a business, but honestly this math is like the
| piracy math and we didn't buy it back then either.
|
| Some teenager downloading 20k songs _does not mean_ that
| they saved $20k[1], nor does it mean that the record
| labels _lost_ $20k.
|
| In your case, the relevant question is "how much did your
| revenue increase by after you started 10x your utility
| code?"
|
| [1] Assuming the songs are sold on the market for $1
| each.
| bananapub wrote:
| that seems like a silly way to think about it.
|
| OP wanted a thing. in the past, they've been OK paying
| $10k for similar things. now they're paying $200/month +
| a bunch of their time wrangling it and they're also OK
| with that.
|
| seems reasonable to consider that "$10k of value" in very
| rough terms which is of course how all value is measured.
| lelanthran wrote:
| > OP wanted a thing. in the past, they've been OK paying
| $10k for similar things.
|
| Okay, then their costs should have come down similarly,
| no? OP said they were a business and that these weren't
| luxury hobby things but business needs. In which case, it
| must reflect on the bottom line.
|
| I operate as a business myself (self-employed), and I can
| generally correlate purchases with the bottom line almost
| immediately for some things (Jetbrains, VPSes for self-
| hosted git, etc) and correlate it with other things in
| the near future (certifications, conferences, etc).
|
| The idea that "here is something I recently started
| paying a non-trivial amount for but it does not reflect
| on the bottom line" is a new and alien concept to me.
| arolihas wrote:
| When people made studio ghibli versions of themselves for
| free, were they creating hundreds of dollars worth of
| value since that's how much it would've cost a freelancer
| to commission such a picture? I would say rather the
| value of the pictures themselves became very cheap.
| roncesvalles wrote:
| I have a feeling you'd have had better results if you
| actually paid $10k/month to a good dev or three in a LCoL
| geo.
|
| You can actually hire a _few_ excellent devs for very
| little money. You just can 't hire 20k of them and convince
| them to move to a certain coastal peninsula with high rent
| and $20 shawarmas, for very little money each.
| alecco wrote:
| Agree. But I think Anthropic is the outlier. Maybe
| ElevenLabs, too.
| cootsnuck wrote:
| They're still gonna be an estimated $3 billion in the hole
| though. Jury still out of there is really "something there".
| logsr wrote:
| growing ARR is easy when you are selling dollars for cents.
| people hyping ARR as an meaningful investment indicator are a
| dead giveaway that we are in fact in a bubble.
| Keyframe wrote:
| For sure, but then again - Nvidia $4T?! I can't shake the
| feeling though that with Nvidia we're looking at another Sun
| type of situation from _the bubble_. Remember the dot in dot
| com?
| mark_l_watson wrote:
| NVidia is being propped up by the US government. Huawei's
| new chips are lower tech but would probably hit a good
| 'practical sweet spot' for AI data centers in many
| countries around the world but our current administration
| is threatening economic violence against any countries who
| choose to use more cost effective Huawei AI chips.
|
| I don't want to descend into talking politics, but I want
| to say that geopolitics, the rising geopolitical 'south',
| etc., is fascinating stuff - much more interesting and
| entertaining than anything fictional on Netflicks or HBO!
| SJC_Hacker wrote:
| Then why didn't DeepSeek use the Huawei chips, and as
| opposed to the H800s ?
| hn_throwaway_99 wrote:
| "Sooner or later the bubble's gonna burst" and "There's
| definitely something there" aren't mutually exclusive - in
| fact they often go together.
|
| It makes me perhaps a little sad to say that "I'm showing my
| age" by bringing up the .com boom/bust, but this feels
| exactly the same. The late 90s/early 00s were the dawn of the
| consumer Internet, and all of that tech vastly changed global
| society and brought you companies like Google and Amazon. It
| also brought you Pets.com, Webvan, and the bajillion other
| companies chronicled in "Fucked Company".
|
| You mention Anthropic, which I think is in a good a position
| as any to be one of the winners. I'm much less convinced
| about tons of the others. Look at Cursor - they were a first
| moving leader, but I know tons of people (myself included)
| who have cancelled their subscription because there are now
| better options.
| pqtyw wrote:
| Not really much a of stuck bubble this time, though.
| Besides Nvidia and a handful of other HW companies, at
| least. Almost all of the very high valuations are for
| private companies and usually the amount of actual money
| involved in is relatively low.
| ttrmw wrote:
| what're you finding better than cursor now?
| rock_hard wrote:
| Devin is light years ahead of Cursor. It's not even the
| same category!
|
| I stopped writing code by hand almost entirely and my
| output (measured in landed PRs) has been 10x
|
| And when I write code myself then it's gnarly stuff and I
| want AI to get out of my way...so I just use Webstorm
| andrewmutz wrote:
| Cline is absolutely fantastic when you combine it with
| Sonnet 4. Always use plan mode first and always have it
| write tests first (have it do TDD). It changed me from a
| skeptic to a believer and now I use it full time.
| v5v3 wrote:
| How much is it costing you?
| jjmarr wrote:
| As much as you theoretically want to spend, since it's
| pay-per-use.
|
| I spend $200/month by using Sonnet 4. Could be higher if
| you want to use Opus.
| macrolime wrote:
| You can use Claude Code as a provider if you want it
| subscription based
|
| https://docs.cline.bot/provider-config/claude-code
| ewoodrich wrote:
| I use Roo Code (Cline fork) and spend roughly $15-30/mo
| by subscribing to Github Copilot Pro for $10/mo for
| unlimited use of GPT-4.1 via the VS Code LM API, and a
| handful of premium credits a month (I use Gemini 2.5 Pro
| for the most part).
|
| Once I max out the premium credits I pay-as-you-go for
| Gemini 2.5 Pro via OpenRouter, but always try to one shot
| with GPT 4.1 first for regular tasks, or if I am certain
| it's asking too much, use 2.5 Pro to create a Plan.md and
| then switch to 4.1 to implement it which works 90% of the
| time for me (web dev, nothing too demanding).
|
| With the different configurable modes Roo Code adds to
| Cline I've set up the model defaults so it's zero effort
| switching between them, and have been playing around with
| custom rules so Roo could best guess whether it should
| one shot with 4.1 or create a plan with 2.5 Pro first but
| haven't nailed it down yet.
| greggh wrote:
| Looking at Cline, wondering what the real selling points
| for Roo Code are. Any chance you can say what exactly
| made you go with Roo Code instead of Cline?
| ewoodrich wrote:
| Cline has two modes (Plan and Act) which work pretty well
| but Roo Code has 5 modes by default. (Code, Ask,
| Architect, Orchestrator, Debug) and it's designed so that
| users can add custom modes. e.g. I added a Code (simple)
| mode with instructions about the scale/complexity of
| tasks it can handle or decide to pass it to Code for a
| better model. I also changed the Architect mode to
| evaluate whether to redirect the user to Code or Code
| (simple) after generating a plan.
|
| Roo Code just has a lot more config exposed to the user
| which I really appreciate. When I was using Cline I would
| run into minor irritating quirks that I wished I can
| change but couldn't vs. Roo where the odds are pretty
| good there are some knobs you could turn to modify that
| part of your workflow.
| g42gregory wrote:
| Claude Code with Pro, Max100, or Max200 subscriptions.
| Works with any IDE including none.
|
| For the time being, nothing comes close, at least for me.
| 6Az4Mj4D wrote:
| Can you please share your Claude usage workflow?
|
| I use Github copilot and often tend to be frustrated. It
| messes up old things while making new. I use Claude 4
| model in GH CP.
| fzzzy wrote:
| I use github copilot chat right now. First I use ask mode
| to ask it a question about the state of the codebase
| outlining my current understanding of the condition of
| the code. "I'm trying to x, I think the code currently
| does y." I include a few source files that I am talking
| about. I correct any misconceptions about the plan the
| llm may have and suggest stylistic changes to the code.
| Then once the plan seems correct, I switch to agent mode
| and ask it to implement the change on the codebase.
|
| Then I'll look through the changes and decide if it is
| correct. Sometimes can just run the code to decide if it
| is correct. Any compilation errors are pasted right back
| in to the chat in agent mode.
|
| Once the feature is done, commit the changes. Repeat for
| features.
| 6Az4Mj4D wrote:
| Does it remember context from chat mode and when you
| switch to agent mode?
| addandsubtract wrote:
| Yes. I think it used to be separate tabs, but now
| chat/agent mode is just a toggle. After discussing a
| concept, you can just switch to agent mode and tell it to
| "implement the discussed plan."
| Paradigma11 wrote:
| Yes, it can't change between edit and ask/agent without
| losing context but ask <-> agent is no problem. You can
| also change to your custom chat modes
| https://code.visualstudio.com/docs/copilot/chat/chat-
| modes without losing context. At least that's what I just
| did in VSCode Insiders.
|
| Here are some nice copilot resources:
| https://github.com/github/awesome-copilot
|
| Also, I am using tons of markdown documents for planning,
| results, research.... This makes it easy to get new agent
| sessions or yourself up to context.
| ghm2180 wrote:
| I also do the same. I am on the 200$ maxpro plan. I often
| let the plan go to pretty fine level of detail, e.g.
| describe exactly what test conditions to check, what
| exact code conditions to follow. Do you write this to a
| separate plan file? I find myself doing this a lot since
| after compaction Claude starts to have code drift.
|
| Do you also get it to add to it's to-do list?
|
| I also find that having the o3 model review the plan
| helps catch gaps. Do you do the same?
| csomar wrote:
| GitHub Copilot models are intentionally restricted, which
| unfortunately makes them less capable.
|
| I'm not the original poster, but regarding workflow, I've
| found it works better to let the LLM create one instead
| of imposing my own. My current approach is to have 10
| instances generate 10 different plans, then I average
| them out.
| mkozlows wrote:
| Github Copilot is weirdly bad, and all the alternatives
| are better. Sometimes people think "they have the same
| model, must be the same," but it's not.
| cft wrote:
| My problem with Claude code versus Cursor is that with
| Cursor I could "shop around" the same context with
| different foundational model providers, often finding
| bugs this way or or getting insights.
|
| Sometimes one model would get stuck in their thinking and
| submitting the same question to a different model would
| resolve the problem
| virgildotcodes wrote:
| I'm unaffiliated, but I've really been enjoying this -
| https://github.com/BeehiveInnovations/zen-mcp-server
|
| It allows you to have CC shoot out requests to o3, 2.5
| pro and more. I was previously bouncing around between
| different windows to achieve the same thing. With this I
| can pretty much live in CC with just an editor open to
| inspect / manually edit files.
| hn_throwaway_99 wrote:
| This was my answer as well. And I think it just
| highlights all the serious dangers for the "API wrapper
| companies" compared to the foundation model companies.
|
| User experience is definitely worth something, and I
| think Cursor had the first great code integration, but
| then there is very little stopping the foundation model
| companies from coming in and deciding they want to cut
| out the middleman if so desired.
| ForHackernews wrote:
| I genuinely don't understand what value Cursor itself
| brings. It's like a wrapper for some APIs, right? As far as
| I can tell there's like four actual AI firms in the world
| and everyone else is trying to whitelabel. It reminds me of
| the hosting industry in the early 2000s.
| xyzzy9563 wrote:
| It's a very well done wrapper that improves your coding
| productivity a lot.
| gruez wrote:
| The problem is that they have no moat and the underlying
| provider can easily cut them out.
| infecto wrote:
| I think you underestimate the difficulty in getting the
| tool chain running efficiently in the IDE. It's a
| significant moat and I suspect their spend is too
| attractive to cut them off from an API especially when
| most of the model providers are not exactly competing
| fully in this space yet or at least not with the same
| enthusiasm.
| dboreham wrote:
| Interesting to see multiple posts here saying this.
| Pretty clearly it isn't true. The IDE is owned by
| Microsoft. The model is owned by Anthropic or Google or
| whoever. A business can't be made from a thin sandwich
| filling between the two.
| infecto wrote:
| Hey guys we have a guy here stating pretty clearly it
| isn't true. He clearly is the authority on the topic
| because he said so.
|
| The shell of the IDE is open source. It's true there is
| some risk on the supply of models and compute but again
| none of those, except MSFT which does not even own any of
| the SOTA models, have any direct competition. OpenAI has
| codex but it's half baked and being bundled in ChatGPT.
| It is in nobodies interest to cut off Cursor as at this
| point they are a fairly sustained and large customer. The
| risk exists but feels pretty far fetched until someone is
| actively competing or Cursor gets bought out by a OpenAI.
|
| Again, what proof do you have that there is zero
| complexity or most being driven by the sandwich filling.
| Most of OpenAIs valuation is being driven by the wrapper
| ChatGPT not API usage. I have written a number of
| integrations with LLM APIs and while some of it just
| works, there is a lot of nuance to doing it effectively
| and efficiently at scale. If it was so simple why would
| we not see many other active competitors in this space
| with massive MAUs?
| xyzzy9563 wrote:
| Not really, it's pretty hard to get the editor and code
| editing via AI working as well as they did.
| macrolime wrote:
| If it's so hard, then why are there multiple open source
| projects that are just as good?
| xyzzy9563 wrote:
| They're not just as good unless you are willing to spend
| huge amounts in API credits.
| yunwal wrote:
| > and the underlying provider can easily cut them out
|
| what? Do you think providers (or their other customers)
| don't care about the business implications of a decision
| like this? All so that cursor can bring their significant
| customer base to a nearly-indistinguishable competitor?
| cheema33 wrote:
| > I genuinely don't understand what value Cursor itself
| brings. It's like a wrapper for some APIs, right?
|
| By similar token Windows is mostly a wrapper around Intel
| and AMD and now Qualcomm CPUs. Cursor/Windsurf add a lot
| of useful functionality. So much so so that Microsoft
| GitHub Copilot is losing marketshare to these guys.
| infecto wrote:
| Amazing how folks make comments without even trying it
| and especially making a comment similar to how Dropbox is
| simply rsync, right?
|
| It is a lot less trivial than people like yourself make
| it out to be to get an effective tool chain and
| especially do it efficiently.
| ForHackernews wrote:
| That's why Dropbox is a trillion dollar company and not a
| feature called iCloud, right?
| infecto wrote:
| Are you trying to make a point or just being defensive
| for no reason? You called out something without having
| any experience or knowledge and then did the classic
| "it's just a wrapper".
| ForHackernews wrote:
| Sorry, I thought the point was clear: Dropbox (file sync)
| is a feature, not a product. Cursor (AI in your IDE)
| likewise, is a feature, not a product.
|
| I am old and I remember when you could make a lot of
| money offering "Get Your Business On The Information
| Superhighway" (HTML on Apache) and we're in that stage of
| LLMadness today, but I suspect it will not last.
| infecto wrote:
| "It's like a wrapper for some APIs, right?"
|
| Don't be sorry it shows your true colors. The point
| stands that you continue to step around. Cursor and other
| tools like it are more than a trivial wrapper but of
| course you have never used them so you have no idea. At
| least give yourself some exposure before projecting.
|
| Dropbox is still a $5+bn business. Cursor is still
| growing, will it work out, I don't know but lots of folks
| are seeing the value in these tools and I suspect we have
| not hit peak yet with the current generation. I am not
| sure what a service business like a small biz website
| builder has to do with Cursor or other companies in
| adjacent spaces.
| ForHackernews wrote:
| What "true colors"? I think I've been pretty consistent
| that I think Cursor is a commodity. You're surprisingly
| hostile and defensive about your preferred autocomplete
| plugin. You're right, I haven't used Cursor, but I've
| used similar tools like Copilot.
|
| Your characterization of hosting as "a small biz website
| builder" is revealing.
| https://finance.yahoo.com/quote/GDDY/ is the one that
| made it and is now a $24B firm, but there were at least
| dozens of these companies floating around in the early
| 2000s.
|
| Why are you so sure Cursor is the new GoDaddy and not the
| new Tripod? https://www.tripod.lycos.com/
| infecto wrote:
| You've been dismissive from the start without any real
| engagement with the product. I pointed out that you
| haven't used Cursor, and rather than reflect on that,
| you've responded with sarcasm and condescension.
|
| The only person being defensive here is you. My point was
| simple: tools like Cursor are more than just "wrappers."
| Whether it becomes a massive business or not, revenue is
| growing, and clearly many users find enough value to
| justify the subscription. You don't have to like it but
| writing it off without firsthand experience just weakens
| your argument.
|
| At this point, you're debating a product you haven't
| tried, in a market you're not tracking. Maybe sit this
| one out unless you have something constructive to say
| beyond "it's just a wrapper".
| lelanthran wrote:
| > I genuinely don't understand what value Cursor itself
| brings. It's like a wrapper for some APIs, right? As far
| as I can tell there's like four actual AI firms in the
| world and everyone else is trying to whitelabel. It
| reminds me of the hosting industry in the early 2000s.
|
| Yes, there's (maybe?) four, but they're at the very
| bottom of the value chain.
|
| Things built on top of them will be higher up the value
| chain and (in theory anyway) command a larger margin,
| hence a VC rush into betting on which company actually
| makes it up the value chain.
|
| I mean, the only successes we see now are with coding
| agents. Nothing else has made it up the value chain
| except coding agents. Everything else (such as art and
| literature generation) _is still_ on the bottom rung of
| the value chain.
|
| That, by definition alone, is where the smallest margins
| are!
| rickyhatespeas wrote:
| The value is the UX/DevX. Though, they are essentially
| just a fork of VS Code so it's hard to justify using
| instead of VS Code + Copilot or Continue which is almost
| the same UX now.
|
| That's the problem with most "AI" products/companies that
| still isn't being answered. Why do people use your
| tool/service if you don't own the LLM which is most of
| the underlying "engine"? And further, how do you stay
| competitive when your LLM provider starts to scale RL
| with whatever prompting tricks you're doing, making your
| product obsolete?
| lizardking wrote:
| Cursor isn't my preferred environment for development,
| but for me, it yields much better results than Copilot.
| Continue and Cline bugged out on me so badly, and so
| frequently, that I didn't find them worth using. YMMV
| danudey wrote:
| If you're interested, I recommend checking out Kiro from
| Amazon.
|
| Every time I've tried Copilot or Cursor, it's happily
| gone off and written or rewritten code into a state it
| seemed very proud of, and which didn't even work, let
| alone solve the problem I put to it.
|
| Meanwhile, Kiro:
|
| 1. Created a requirements document, with user stories and
| acceptance criteria, so that we could be on the same page
| about the goals
|
| 2. Once I signed off on that, it then created a design
| document, with code examples, error handling cases, and
| an architecture diagram, for me to review
|
| 3. After that looked good, it set about creating an
| itemized task list for each step of the implementation,
| broken down into specific tasks and sub-tasks and
| including which of the acceptance criteria from step 1
| that task addressed
|
| 4. I could go through the document task by task, ask it
| to work on it, and then review the results
|
| At one point, it noticed that the compiler had reported a
| minor issue with the code it had written, but correctly
| identified that resolving that issue would involve
| implementing something that was slated for a future task,
| so it opted to ignore the issue until the appropriate
| time.
|
| For once, I found myself using an AI tool that handled
| the part of the job I hate the most, and am the worst at:
| planning, diagramming, and breaking down tasks. Even if
| it hadn't been able to write any working code at all, it
| already created something useful for me that I could have
| built off of, but it did end up writing something that
| worked great.
|
| In case anyone is curious about the files it created, you
| can see them here: https://github.com/danudey/rust-
| downloader/pull/4
|
| Note that I'm not really familiar with Rust (as most of
| the code will demonstrate), so it would probably have
| been far faster for an experienced Rust programmer to
| implement this. In my case, though, I just let it do its
| thing in the background and checked in occasionally to
| validate it was doing what I expected.
| ForHackernews wrote:
| Wow, that sounds like it might be useful!
| komali2 wrote:
| Don't they have their own model for the inline
| completions? For me I find it really nice to preserve
| some brain energy by doing one repetitive change and just
| tab spamming it to get it done everywhere. I could get it
| done maybe just as fast with a macro in vim, but, Cursor
| lets me preserve the brain energy for something harder.
|
| Meanwhile other "wrappers" e.g. in nvim or whatever,
| don't have this feature, they just have slightly better
| autocomplete than bare LSP.
| joshdavham wrote:
| > It makes me perhaps a little sad to say that "I'm showing
| my age"
|
| Please don't say stuff like that.
|
| As a 20-something who was in diapers during the dot-com
| boom, I really appreciate your insight. Thanks for sticking
| around on HN!
| walthamstow wrote:
| Seconded
| infecto wrote:
| Feels nothing like the same. The .com bubble was largely
| companies with no business, unchanged revenue but still
| having massive swings in price in private and public
| markets.
|
| Cursor has a $500mm ARR your anecdote might be meaningful
| in the medium turn but so far growth as not slowed down.
| acdha wrote:
| > The .com bubble was largely companies with no business
|
| Ah, yes, companies like Amazon.com, eBay, PayPal,
| Expedia, and Google. Never heard of those losers again.
| Not to mention those crazy kids at Kozmo foolishly
| thinking that people would want to have stuff delivered
| same-day.
|
| The two lessons you should learn from the .com bubble are
| that the right idea won't save you from bad execution,
| and that boom markets-especially when investors are
| hungry for big returns-can stay inflated longer than you
| think. You can be early to market, have a big share, and
| still end up like Netscape because Microsoft decided to
| take the money from under the couch cushions and destroy
| your revenue stream. That seems especially relevant for
| AI as long as model costs are high and nobody has a moat:
| even if you're right on the market, if someone else can
| train users to expect subsidized low prices long enough
| you'll run out of runway.
| infecto wrote:
| You're right that many .com companies lacked fundamentals
| but you're cherry-picking survivors. For every Amazon,
| there were dozens of Pets.coms. The current AI wave does
| feel different in terms of revenue traction (e.g.,
| Cursor's $500M ARR), but the broader lesson still
| applies: hype cycles don't discriminate between good and
| bad execution in the short term.
|
| Cursor's growth is impressive, but sustained dominance
| isn't guaranteed. Distribution, margins, and
| defensibility still matter and we haven't seen how
| durable any of that is once incentives tighten and infra
| costs stop being subsidized.
| acdha wrote:
| My point in listing survivors was simply to make the
| point that while there were plenty of doomed businesses,
| there were also many giants which were big at the time
| and could be told apart by looking at their fundamentals
| -- they had real people paying them money for tangible
| things at a price which could be profitable. Amazon
| famously reported low numbers due to reinvestment but
| they were profitable in most business segments a few
| years after entering, which was quite different from the
| "lose money on every sale, make it up on volume" plays
| many dotcoms made.
| infecto wrote:
| How does that refute the statement you quoted? I said the
| vast majority of companies during the bubble had no
| business, were run on hype dollars and had insane P/E
| ratios. That supports a handful of companies making it
| through the bloodbath, but also a cherry picked examples
| that neither refutes my claim or supports yours.
| acdha wrote:
| You said "largely" and I think that's painting with too
| broad a brush. The dotcom world included a bunch of
| companies which are still around (or were acquired later
| after surviving the collapse), and it wasn't hard to tell
| who those were even at the time. There was a lot of lazy
| boosterism and criticism painting the whole field as the
| same, and that was a disservice to readers who could've
| used a more thoughtful triage approach. That's especially
| the case for companies like Kozmo which actually had a
| popular idea and had the potential to be profitable (they
| were in most urban markets) but made the mistake of
| expanding too quickly or taking on more debt than they
| could service.
| macrolime wrote:
| Thing is that it took 10-15 years for the stocks of these
| companies to reach the same marketcap again.
| acdha wrote:
| That's what people predicted bit, for example, on
| Amazon's case it was less than 3 years because they just
| kept posting solid numbers. The thing which all of those
| companies have in common is that they stood out from the
| Pets.com types in having profitable revenue - they didn't
| need a miracle to be profitable, only for customers to
| keep buying.
| overfeed wrote:
| > The .com bubble was largely companies with no business,
| unchanged revenue but still having massive swings in
| price in private and public markets.
|
| There also were companies like Sun and Cisco who had
| real, roaring business and lots of revenue that depended
| on loose start-up purse-strings, and VC exuberance...
|
| Sun and Cisco both survived the .com bust, but were never
| the same, nor did theu ever reach their high-water marks
| again. They were shovel-sellers, much like Amazon and
| Nvidia in 2025.
| ido wrote:
| Or yahoo- they were the premier sellers of ad space
| online (like google today) and made a lot of money from
| over-funded tech companies overpaying for online
| advertising during the boom years.
| infecto wrote:
| For sure but unlike then we are in a very different
| buying environment. Investors are more discerning even
| though folks here would like tot think differently. Cisco
| had something at peak like a 179x pe. That is a vastly
| different world than what we see Nvidia at today. I am
| not saying it cannot fail or collapse but to say this
| feels like the .com bubble is wrong.
| freejazz wrote:
| >Feels nothing like the same. The .com bubble was largely
| companies with no business, unchanged revenue but still
| having massive swings in price in private and public
| markets.
|
| I'm an attorney that got pitched the leading legal AI
| service and it was nothing but junk... so I'm not sure
| why you think that's different from what's going on right
| now.
| code51 wrote:
| Anthropic is actually a good point to focus on since Claude
| is very good proof that it's not about the scaling. We are
| not quite there yet but we are "programming" through how we
| shape and filter the input data for training it seems. With
| time, we'll understand the methods to better represent.
|
| Current situation doesn't sound too good for "scaling
| hypothesis" itself.
| yourapostasy wrote:
| > Current situation doesn't sound too good for "scaling
| hypothesis" itself.
|
| But the "scaling hypothesis" is the easiest, fastest
| story to raise money. So it will be leveraged until
| conclusively broken by the next advancement.
| SJC_Hacker wrote:
| > It also brought you Pets.com, Webvan, and the bajillion
| other companies chronicled in "Fucked Company".
|
| The irony with Webvan, they had the right idea about 15
| years too early. Now we have InstaCart, DoorDash, etc. You
| really needed the mobile revolution circa 2010 for it to
| work.
|
| Pets.com is essentially Chewy (successful pet focused
| online retailer)
|
| So, neither of those ideas were really terrible in the same
| vain as say Juicera, or outright frauds like Theranos.
| Overvalued and ill-timed, sure
| fuzzieozzie wrote:
| Don't forget that Amazon's market cap was higher in 1999
| than 2009!
| dom96 wrote:
| I pay $0 and that's already enough for me. Genuinely, what
| are you getting for your $200? I cannot fathom paying that
| much for what seems like I get basically for free anyway.
| tekawade wrote:
| Genuinely curious for the value add with Claude code here.
| Some perspective and/or data is appreciated.
| zaphirplane wrote:
| Why are you paying for that? Are you employed as a dev and
| paying out of your pocket or are you a hobbyist or ?
| babyshake wrote:
| The big question is to what extent they hit a plateau and are
| commoditized. What happens when there is a fully open stack
| that gets Claude Code level results but at a fraction of the
| cost? Not saying that will happen, but that seems to be the
| scenario for a bubble bursting.
| v5v3 wrote:
| Unless they are paying annually, the next big thing could see
| those $200 a month premium users gone.
| westoque wrote:
| > They're getting my $200 a month and it's easily the best
| money I spend
|
| Can you explain? I don't see how $200 makes that much
| difference than what I get from paying $20/month with OpenAI?
| What's the use case?
| 999900000999 wrote:
| Microsoft is obviously the elephant in the room.
|
| I decide to try out the agent built into VS Code. It
| basically matches most of these fly by night "agent" ides
| which are mostly just VS Code forks anyway.
|
| But it's weird. Because Microsoft can use Anthropic's API,
| funnel them revenue and take a loss on Copilot.
|
| We're all getting this stuff heavily subsidized by either VC
| money or big corp money.
|
| Microsoft can eat billions in losses on this if they become
| *the* provider of choice.
|
| This stuff isn't perfect, but this is the worst it'll ever
| be. In 2 years it'll be able to replace many of us.
| csomar wrote:
| 1. If you're maxing out your subscription, they're burning
| money on you.
|
| 2. They don't have a moat. DeepSeek and Kimi are already good
| enough to destroy any high margins they're hoping to generate
| from compute.
|
| Just because something is highly useful doesn't mean it's
| highly profitable. Water is essential to life, but it's dirt
| cheap in most of the world. Same goes for food.
| mark_l_watson wrote:
| I agree. I was experimenting with tool use with Kimi K2
| APIs yesterday - very effective, and so incredibly
| inexpensive. I am retired, now doing independent research,
| so my requirements are very different than most people here
| who are still in the job market or growing their own
| business.
|
| I find a combination of local Ollama models, with very
| inexpensive APis like Moonshot's Kimi with occasional
| Gemini 2.5 Pro use, and occasionally using gemini-cli
| provides extraordinary value. Am I missing out by not using
| one or more $200-$300 a month subscriptions? Probably but I
| don't care.
| rsynnott wrote:
| Economic bubbles _usually_ aren't based on things which are
| entirely worthless; there's generally _something_ there (just
| not enough something to sustain the valuations). There are
| exceptions (NFTs, arguably cryptocurrency as a whole, and of
| course tulips), but those _are_ the exceptions.
| Lalabadie wrote:
| The bubble isn't the value available to buyers, it's the x00%
| multiplier created by speculation.
| freejazz wrote:
| Yeah, the difference between the "something there" and the
| $4b valuation _is_ the bubble.
| __loam wrote:
| It's so funny to see people in this industry get super
| excited about revenue while never mentioning costs.
| lvl155 wrote:
| Not in a bubble yet. Wait till your aunt takes out a second
| mortgage to chase NVDA stock to the moon. My guess is this will
| continue until later this decade with some bumps in between.
| That said, it's absurd these guys are paying people so much
| money for what I think amounts to being context management off
| of some markdowns.
| dustingetz wrote:
| it's not bubble so much as urgency, the trillion dollar club
| are pricing in the risk of losing their position
| massimosgrelli wrote:
| Yes and no. Are AI companies overvalued? Yes. Will most of them
| crash and burn? Yes, they will. Are the words "intelligence" or
| "reasoning" misused? Absolutely. Nonetheless, nobody can deny
| that some of these tools are useful and have demonstrated they
| can generate revenue like no other tool, app, or device before.
| There is something different from the dot-com bubble; many
| barriers have come down since 2000. Everyone can be connected
| 24/7 for a few tens of dollars a month. People trust the
| internet as a medium to perform transactions and access data.
| The real bubble is in the private market valuations, especially
| in the pre-seed stage. Many young entrepreneurs don't
| understand that raising their first round at $30M, $50M, or
| even $100M post-money will put a heavy weight on their
| shoulders approaching the Series A. Raising a funding round is
| a promise you make to the market. Increasingly high
| expectations will burn many wanna be entrepreneurs whose
| contribution to make things better for everyone will be lost
| forever. I'm deeply convinced that the reality check for all
| those companies is the public market, and in today's world, you
| can't go public after 3-5 years if your initial valuation has
| been built on a 20-year-long promise. All the trillion-dollar
| companies we know today went public a few years after their
| creation: Apple, Google, Microsoft, NVIDIA, etc. OpenAI,
| Anthropic, and Cursor are black swans, not evidence of the
| power law.
| cma wrote:
| No, MS went public in 1986, so more than a decade there.
| lowsong wrote:
| > the possibility that we're in a massive bubble thats quite
| divorced from any kind of fundamentals
|
| I'm astounded that anyone still genuinely believes we're not in
| a massive bubble. Of course AI company CEOs are going to say
| we're not and that AGI is just around the corner, it's deeply
| in their financial interest to keep inflating the bubble as
| long as possible.
| mark_l_watson wrote:
| Of course we are in a massive bubble. At least in the US where
| I live, everything is about driving short term profits, with
| less than a little thought to what is good for the non-special
| interests/insider class.
|
| I have lived and worked through two previous 'AI winters' and I
| expect the current bubble to eventually pop in a dramatic way.
| There will be good things produced by AI, but I am skeptical of
| the panic FOMO rush to AGI or super intelligence.
|
| Look at the process of shifting manufacturing out of the USA:
| that was all about driving extreme wealth for special interest
| insiders. Sadly, most people look to their particular little
| political party for some form of relief - how is that working
| out?
| crowcroft wrote:
| Bubble or not these kinds of deals could put a chill on the
| tech startup sector as well.
|
| Things move fast in tech because there isn't nearly as much red
| tape and litigation as there are in other mature industries.
| This is because there's an agreed 'way of doing things'. Take
| funding, grow like crazy, sell/merge or IPO. Everyone wins or
| loses together (even if things are stacked in favour for some
| over others).
|
| Once trust in this process is broken and founders or VCs start
| stacking the deck in their favour the game becomes rigged to
| the point where other people don't want to play anymore. Once
| that trust is gone red tape and litigation appears.
| bilater wrote:
| The problem you don't know which innings we are on and it may
| very well be the 4th/5th. More often than not you lose more by
| not participating in the run up and waiting for the collapse.
| I'd rather ride the wave (as intelligently as I can) than be on
| the sidelines just so I can say I told ya so.
| frankfrank13 wrote:
| Two products that nobody uses, together at last
| rwyinuse wrote:
| I don't see a justification for high valuations of companies that
| aim to build an "AI Software engineer". If something like Devin
| really succeeds, then anyone can use their product to simply
| build their own competing AI engineer. There's no moat, it's just
| another LLM wrapper SaaS.
| ar_lan wrote:
| This is my exact takeaway too, and I'm always surprised it
| doesn't get mentioned often. If AI is truly groundbreaking,
| then shouldn't AI be able to re-implement itself? Which, to me,
| would imply that every AI company is not only full of software
| devs cannibalizing themselves, but the companies themselves
| also are.
| SJC_Hacker wrote:
| This is my watershed for true AGI. It should be able to
| create a smarter version of itself.
|
| Last I checked, feeding the output of an LLM back into its
| training data leads to a progressively worse LLM. (Note I'm
| not talking about distillation, which involves training a
| smaller model, by sacrificing accuracy. I'm referring to an
| equal or greater number of model parameters)
| fragmede wrote:
| If the LLM is given the code for its training and is able
| to improve that, does that count? Because it seems like a
| safe bet that we're already there, the only problem is
| latency of training runs.
| adamoshadjivas wrote:
| I don't see this. The ai software engineer that succeeds, maybe
| it's because of a mixture of very complicated architecture
| derived from novel research etc. You can't replicate that with
| just hiring more human engineers, it takes time and effort and
| elite hiring. Plus enterprise support etc.
|
| Devin etc will give you let's say 10x more engineering power,
| but not necessarily elite one.
| UltraSane wrote:
| This is true for LLMs themselves. If a new LLM is really better
| than all the other ones then it can be used to help improve
| other LLMs.
| SJC_Hacker wrote:
| Is it? Last I checked when you trained an LLM on another's
| output, at best you got the same performance as the original,
| and it was more likely you significantly degraded usefulness.
| (I'm not talking about distillation, where that tradeoff is
| known in return for a smaller, more efficient parameter set)
| alfalfasprout wrote:
| Yep. The reality is folks building these types of companies are
| trying to get acquired as quickly as possible before the house
| of cards fall. This has led to a huge speculative rush of
| acquisitions to avoid FOMO later.
|
| The technology is nowhere close to what they're hoping for and
| incremental progress isn't getting us there.
|
| If we get true AGI agents, anyone can also build a multi-
| billion dollar tech companies on the cheap.
| 4dm1r4lg3n3r4l wrote:
| > If we get true AGI agents, anyone can also build a multi-
| billion dollar tech companies on the cheap.
|
| That's not how the economy works...
| geor9e wrote:
| You're right - AGI would be unfathomable, it would be more
| productive than a quadrillion earths entirely populated by
| MIT valedictorians who just drank 2 espressos each. "Multi-
| billion dollar" would be a silly valuation.
| metalliqaz wrote:
| I can't tell if you're joking or serious.
| taejavu wrote:
| There are any number of tools that already make that promise.
| Turns out it's still hard to complete projects and bring them
| to market.
| swyx wrote:
| i advise you to not take marketing lines too literally and be
| so casually dismissive as a result. you will miss a lot of good
| investments and startups this way and (worse) be lulled into a
| false sense of comfort and security.
| Hansenq wrote:
| This is the logical, satisfying, and probably best conclusion to
| an un-ideal and optically terrible situation all parties were
| placed in.
|
| First, OpenAI wanted to acquire Windsurf. Terrific move! Win-win
| for OpenAI (who needs more AI product) and Windsurf (for the deal
| price). But this fell apart because Windsurf didn't want the IP
| to go to Microsoft (which imo should not have been not a big
| deal, especially if you knew what would have happened next). Big
| loss for all parties for this to have fallen apart.
|
| My biggest question still is why not continue on as an
| independent company? Perhaps losing access to Claude doomed
| signups; perhaps employees/investors had a taste of an exit and
| still wanted it; perhaps due to fiduciary duty to maximize
| returns; perhaps their growth stalled due to the announcement? In
| any case, the founders got a similarly equivalent deal from
| Google, and were arguably wise to pursue it.
|
| But Google's Corp Dev team here is the most maddening. Why not
| fully acquire the entire company, instead of doing the same
| "acquihire and license" deal that was done to Character AI,
| Adept, Scale, etc.? Risk of FTC antitrust review is a thing, but
| Google's not even competitive in the coding market, so I doubt
| there is a review (though I do hear that all acquisitions by
| large tech companies these days are reviewed by default). If
| there's anyone to blame in this situation, it's the FTC and
| Google for pursuing this strategy, instead of a full acquisition.
| Win-win for Google (for the team) and Windsurf (for getting a
| similar acquisition price, but liquid!).
|
| Imo, the founders did a good job ensuring that close to the $3B
| acquisition price was reflected in the $2.5B Google deal--all
| existing investors and vested employee/equity holders are paid
| out; the company also retained $100M which was suspiciously
| similar to the amount needed to pay out all unvested
| employee/equity holders [1]. So theoretically the remaining
| company could pay accelerate vesting, then pay out the cash to
| their remaining employees, and then shut down, to give everyone
| the same exit as an acquisition, or better. This might have been
| the best scenario, because the brand damage to Windsurf as an IDE
| that happened over the weekend was pretty close to unrecoverable
| for them as an independent company.
|
| But instead, the company leadership decided to field acquisition
| offers for the remaining company and IP, and got one from
| Cognition. (I'm actually surprised this acquisition isn't under
| FTC review; it's more plainly an agentic coding company acquiring
| a competitor agentic coding company). In taking the offer, it
| reinforces that the Windsurf IDE will continue to exist, that
| they have a R&D team backing the IDE again, and can marry
| Windsurf's enterprise sales chops with Cognition's product [3].
| Win-win for both Cognition and Windsurf.
|
| So overall, win-win-win all around, except for OpenAI, Varun's
| public reputation (imo, undeserved), and startups hiring
| employees (who might think they might not get a proper exit) [2].
|
| [1] https://x.com/haridigresses/status/1944406541064433848
|
| [2] https://stratechery.com/2025/google-and-windsurf-stinky-
| deal...
|
| [3] https://x.com/russelljkaplan/status/1944845868273709520
| Graphon1 wrote:
| > -all existing investors and vested employee/equity holders
| are paid out;
|
| But the statement from Cognition was: > 100%
| of Windsurf employees will participate financially in this deal
| > 100% of Windsurf employees will have vesting cliffs waived
| for their work to date > 100% of Windsurf employees
| will receive fully accelerated vesting for their work to date
|
| The details matter. "vesting cliffs waived" meaning what?
| Windsurf shares exchanged for Cognition shares? at what ratio?
|
| "Participate financially" means what exactly? They could all
| get a coupon for a free doughnut, and that statement would be
| true.
|
| I'm not saying the employees are getting nothing, or even a raw
| deal. I'm saying we have no idea if the deal is good for them,
| without details.
|
| > theoretically the remaining company could pay accelerate
| vesting, then pay out the cash to their remaining employees,
| and then shut down, to give everyone the same exit as an
| acquisition, or better.
|
| unlikely that will happen. More likely the investors and VCs
| will take the lion's share of the $2.5B, that is what they do.
| That is why they exist. And they'll distribute as thin a slice
| as possible to the employees.
| Hansenq wrote:
| Historically, when a company gets acquired, the terms of the
| acquisition vary wildly. Many acquisitions over the past few
| years have led to a payout of all equity holders, pennies for
| employees, and layoffs for much of the existing team. This
| outcome is no worse than an existing acquisition--people just
| want details because of the new structure. My point is that
| this is financially no worse than an existing acquisition. It
| just _feels_ worse because of how it's structured.
|
| And to your last paragraph, read reference [1]. The
| distribution of that 2.5B is in accordance to the existing
| cap table; it will make sense once you read that tweet. You
| must allocate money according to the cap table, and so that
| allocation is already determined in a company's previous
| funding rounds.
| oytis wrote:
| So the nobility goes to Google and rank and file engineers are
| subject to consolidation, am I reading this right?
| paxys wrote:
| "Consolidation" aka "we got the IP we wanted, you are all now
| redundant"
| cheriot wrote:
| Very curious how we'll look back on Google spending 2 billion
| dollars to "license IP" and hire a handful of people.
|
| If there's 47m software engineers in the world, at $200/month,
| and 50% gross profit that's a $56 billion TAM. Not crazy to think
| it's more if we include the adjacent space of analyst roles that
| write software (sql, advanced excel, etc).
|
| They'll have to crush it to make a $2 billion acquihire look
| reasonable, but it's possible.
| spongebobstoes wrote:
| that's not the market they're thinking of, they're thinking of
| the total amount of money spent on developers per year,
| globally, and capturing a percentage of that
| cheriot wrote:
| Will require a lot of barriers to entry to charge %. Not
| disagreeing with your statement of their thinking, but will
| be v surprised if that pans out.
| citizenpaul wrote:
| They are doing what they've always done skirting the edges of
| antitrust laws by buying up competitors before they become
| competitors so that they can shut them down.
| ivape wrote:
| It's more about not getting embarrassed ever again. The
| breakthrough papers for LLMs came from Google, but not the
| product. This was embarrassing. Even if you have to spend
| double on everything from now on you do it, because Google
| effectively got sucker punched by ChatGPT.
| whamlastxmas wrote:
| It's sad that the organizational failures that led to that
| embarrassment will definitely not change. Too much eagerness
| for subjugation
| SJC_Hacker wrote:
| I don't think its just SDEs they're targeting.
|
| Basically anyone that inputs and outputs goods which can be
| digitized. So writers, graphic artists, accountants, legal
| work, etc.
| prakashn27 wrote:
| I writing this just after the night end llm cannot even replace
| to using Trans i18n react component if it is not in context of
| the file. We are still far from agi
| wonderwonder wrote:
| I've never heard of Cognition (not a slight on them, its just me
| being disconnected). How much was the deal for and how do they
| have this type of money? Wasn't there just an article out
| yesterday or so saying that Windsurf's leadership was going to
| google?
| CSMastermind wrote:
| The worst AI coding tool I've tried aquiring the best is
| interesting.
| g42gregory wrote:
| I thought OpenAI already acquired Windsurf for $3BN? And
| Anthropic refused to give them discounted version of Claude 4
| because of that?
| xyst wrote:
| "Devin" is making itself fatter and prepping itself for another
| acquisition. Google or MS? Maybe Apple?
|
| The "world-class GTM" is a joke.
| vonnik wrote:
| that the founders went one way and the engineers went another
| suggests a failure of leadership IMHO.
| bluelightning2k wrote:
| It's weird being a Windsurf fan on HN. You get the feeling that
| you're in the minority or doing it wrong because the dialog is
| dominated by Cursor and (more recently) Claude Code.
|
| It's also been a lot of random stuff recently with their 3
| separate Ross and Rachel acquisition storylines.
|
| Some takeaways:
|
| 1. Devin/Cognition definitely have a legit AI dev agent now
|
| 2. It's crazy what Google passed on. The fact that it was worth
| it to them without the traditional best assets is wild. Guess
| that's what happens when you play on ultra hard mode with an
| infinite money glitch.
|
| 3. I am worried/pre-emptively sad that Windsurf will likely go
| away or get nerfed, more expensive etc.
| TiredOfLife wrote:
| https://www.reddit.com/r/ChatGPTCoding/comments/1m05ar4/it_s...
| alittletooraph2 wrote:
| "If the founder/CEO and best engineers at Windsurf don't
| believe in that product/company, why should you?"
|
| ^ Any company that competes with them could say that and it
| would create some pause.
| DannyBee wrote:
| Windsurf is the soham parekh of acquisitions at this point. Is
| there anyone _not_ acquiring windsurf?
| jgalt212 wrote:
| All these agentic tools are great for Nvidia. They just hoover up
| tokens like no tomorrow.
| greenhat76 wrote:
| I have been testing Devin for a long time, early access and all.
| I'm not impressed by it at all, a decent developer with their LLM
| of choice does a far better job.
| deepdarkforest wrote:
| I mean isn't that amazing for an 1 year old product? If it's
| already better than a terrible dev with an LLM, or better than
| a decent dev without an LLM, it's not hard to imagine in 2-3-5
| years Devin is better and cheaper than most hires you could do.
| Without having to do HR, equity etc.
| komali2 wrote:
| I just started trying out Codeium in Nvim on a recommendation
| from a video that's like, less than 6 months old. Oops, actually,
| codeium is Windsurf now. But the tool is still codeium.nvim at
| least.
|
| I guess it's about to happen again!
| i_love_retros wrote:
| What a waste of money!
___________________________________________________________________
(page generated 2025-07-15 23:02 UTC)