A few points that are getting overlooked:
- OpenAI is buying WindSurf and probably did diligence on these models before it decided to invest.
- WindSurf may have collected valuable data from it users that is helpful in training a coding-focused AI model. The data would give a 6 month lead to OpenAI which is probably worth the $3B.
- Even if Windsurf's frontier models are not better than other models for coding, if they excel in a few key areas it would justify significant investment in their methodology (see points above).
- There are still areas of coding where even the top frontier models falter that would seemingly be ripe for improvement via more careful training. Notably, making the model better at working within a particular framework and version, programming language version, etc. Also better support for more obscure languages and libraries/versions and the ability to "lock in" on the versions that the developer is using. I've wasted a lot of time trying to convince OpenAI models to use OpenAI's latest Python API -- even when given docs and explicit constraints to use the new API, OpenAI frontier models routinely (incorrectly) update my code to use old API conventions and even methods that have been removed!
Consider that the basic competency of doing a frontier coding model well is likely one of the biggest opportunities in AI right now (second to reasoning and in my opinion tied with image analysis and production). An LLM that can both reason and code accurately could read a chapter in a textbook and code a 3D animation illustrating all of the concepts as a one-shot exercise. We are far from that at present even in OpenAI's best stuff.
Thanks - this does help contextualize the $3B acquisition. When the story first broke all they seemed to be paying for was a coding agent (of which there are sooo many out there) and the large windsurf user base (but with no moat). So a lot of us were rather skeptical. The valuation is still kinda insane, I think, but Windsurf’s ability to train a frontier model - and with a much smaller team than the big AI shops - is the key differentiator from the Clines, Cursors, Aiders etc.
It is a bit of a shame that we’ll never get to see what they could do on their own. But I hope their clearly very talented employees do very well out of this.
> Thanks - this does help contextualize the $3B acquisition.
Agreed. My initial reaction to the $3B acquisition was similar to yours. Seeing this announcement made me rethink it a bit.
this is clearly the right take… it’s fun to semi-dunk on “how on earth is that the valuation”, but this is one of those rare cases where the tech and platform are genuinely more valuable in the hands of the acquirer than they ever could be in the hands of the acquiree. because i think windsurf has executed as well as one possibly could in the space, but openai is the SOTA model king, and i don’t see that changing anytime soon.
Minor nit: OpenAI is in a three way tie for SOTA models with Google and Anthropic. They are the king of marketing attention, studio Ghibli imitation, and consumer subscriptions, though.