OpenAI’s Windsurf deal is off, and Windsurf’s CEO is going to Google

IMO other than the Microsoft IP issue, I think the biggest thing that has shifted since this acquisition was first in the works is Claude Code has absolutely exploded. Forking an IDE and all the expense that comes with that feels like a waste of effort, considering the number of free/open source CLI agentic tools that are out there.

Let's review the current state of things:

- Terminal CLI agents are several orders of magnitude less $$$ to develop than forking an entire IDE.

- CC is dead simple to onboard (use whatever IDE you're using now, with a simple extension for some UX improvements).

- Anthropic is free to aggressively undercut their own API margins (and middlemen like Cursor) in exchange for more predictable subscription revenue + training data access.

What does Cursor/Windsurf offer over VS Code + CC?

- Tab completion model (Cursor's remaining moat)

- Some UI niceties like "add selection to chat", and etc.

Personally I think this is a harbinger of where things are going. Cursor was fastest to $900M ARR and IMO will be fastest back down again.

Is this $900M ARR a reliable number?

Their base is $20/mth. That would equal 3.75M people paying a sub to Cursor.

If literally everyone is on their $200/mth plan, then that would be 375K paid users.

There’s 50M VS Code + VS users (May 2025). [1] 7% of all VS Code users having switched to Cursor does not match my personal circle of developers. 0.7% . . . Maybe? But, that would be if everyone using Cursor were paying $200/month.

Seems impossibly high, especially given the number of other AI subscription options as well.

[1] https://devblogs.microsoft.com/blog/celebrating-50-million-d...

Maybe the OP got confused with Cursor's $900mil raise? https://cursor.com/blog/series-c

Last disclosed revenue from Cursor was $500mil. https://www.bloomberg.com/news/articles/2025-06-05/anysphere...

Yeah that’s probably it!