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OpenAI x Windsurf: $3 B deal—are agentic IDEs the future?
Inside: Agentic development environments, 10× faster fusion design, and how Stripe’s AI is crushing fraud
Nathan Lands
May 09, 2025 • Estimated Reading Time: 7 minutes
Hi everyone,
This is Lore Brief, your weekly edge in the age of AI.
Thanks for being one of 31,000+ builders and techno-optimists reading this week. 🙏
🚀 Things Are Getting Better
©shutterstock/Efman
Why it matters: A UT Austin group uncovered a hidden symmetry that lets engineers simulate complex stellarators ten times faster. Shorter design loops compress the road-map to commercial fusion, exactly the abundant energy platform advanced AI (and ultimately ASI) will feed on.
⚡️ Quick News
Stripe slashes fraud with a transformer model – detection jumps 59 % → 97 %.
xAI teams with Palantir & TWG – Musk’s first big enterprise push into finance.
Gemini 2.5 Pro tops coding leaderboards – Google overtakes Claude & GPT-4o in WebDev Arena.
💡 What I’m Thinking About
Are Agentic IDEs the Future of Software?
1 · What Just Happened
OpenAI is acquiring Windsurf for about $3 billion. (Bloomberg)
Cursor is raising $900 million at a $9 billion valuation. (Financial Times)
That's $12 billion of market value for coding-tool companies no one knew about 2 years ago. Insane.
For perspective, Microsoft paid $7.5 billion for GitHub in 2018.
[Source]
Today, the AI-native code editor Cursor, a fork of VS Code, is worth more than that. 🤯
2 · Why The Crazy Valuations?
Our world runs on software. AI coding tools are already dramatically increasing the productivity of developers who understand how to use AI well.
Here's simplified back-of-the-napkin logic for possible productivity gains:
Tier (rough productivity multiple) | Representative tools | Core capability |
|---|---|---|
Smart autocomplete (≈ 3 ×) | GitHub Copilot, TabNine | Multi-line completions & inline docs |
AI editors with scoped agents (≈ 4 – 6 ×) | Windsurf, Cursor | Local planning + file edits + test/command loops |
Single-task dev agents (≈ 6 – 10 ×) | Devin-style demos | End-to-end ticket execution, but one ticket at a time |
Agentic Development Environments (≈ 10 – 100 ×) | Future ADEs | Multi-ticket planning, repo graph, CI, secure merge gate |
3 · From Autocomplete to ADE
PREDICTION: The next big thing will be an Agentic Development Environment (ADE).
An ADE(as opposed to a standard IDE) is an integrated workspace where autonomous agents plan → implement → test → review → merge code with minimal human oversight and a full audit trail.
Imagine a developer describing a new feature in plain English. The ADE then proposes a complete implementation plan, drafts code across multiple files, generates tests, and highlights potential integration issues, all before a human engineer reviews and approves the merge.
This gives developers superpowers. It doesn’t replace them.
4 · Where the Players Stand (snapshot · May 9, 2025)
Here's a quick breakdown of key players:
Platform | What It Nails right now | Major Gaps (as of 9 May 2025) |
|---|---|---|
Cascade agent handles multi-file edits, fixes tests before they fail, remembers codebase “memories,” and supports MCP tool plugs. | No long-horizon epic-to-ticket planner, no exported repo graph, limited native CI / ticket wiring. | |
Agent mode / Composer explores the whole repo, plans step-by-step changes, runs terminal commands, and auto-applies diffs; early MCP and Jira hooks exist. Cursor | CI gating and ticket workflow still feel bolt-on; lacks a multi-ticket planner and deterministic “stay-green” test harness. | |
End-to-end Slack demos show a single agent taking a ticket from scratch to PR | Real-world users still flag reliability and sluggish execution. | |
Private-alpha turns tickets into merge-ready PRs; unified context spans code, docs, tickets; early customer pilots live. | Scoring higher than Devin on benchmarks, but it isn’t generally available yet. |
Speculation: Factory currently checks the most ADE boxes. Its seed and Series A were led by Shaun Maguire, the Sequoia partner behind huge bets such as SpaceX, Stripe, and Sequoia’s $600 million co-investment in Elon Musk’s Twitter take-private. That capital and Maguire’s direct line to Musk and the White House give Factory a real shot at winning the ADE race, and it shows Sequoia has already placed its bet.
Why It Matters
Engineering headcount has always throttled software output. There are always things you wish you could build that would be great for your business, but you can’t because of how hard software is.
If ADEs allow ten engineers to do the work of one hundred, every roadmap, hiring plan, and competitive moat shifts dramatically. Windsurf’s acquisition and Cursor’s valuation aren't just headlines—they’re the starter pistol. The real race, building the first production-grade ADE, is still wide open.
I’m watching this space very closely.
Whoever creates a true ADE widely adopted by enterprises will significantly increase global GDP and become a $ 100 B+ company.
🛠️ Want my favorite Coding AI tools? Get them here.
🎙 The Next Wave: RepoPrompt Demo
In this episode, I had the honor of interviewing the founder of RepoPrompt, one of my favorite AI tools for coding. One that, for whatever reason, isn’t well known and IMO often works way better than the much hyped vibe coding. Check it out! → Watch | Listen
📚 Things I’m Learning From
[Link] – AI's Trillion-Dollar Opportunity: Sequoia AI Ascent 2025 Keynote
[Link] – Matan Grinberg from Factory discusses their ADE(Agentic Development Environment). This could be the next big trend in AI-powered software development after Cursor and Windsurf.
[Link] – How To Use Ai Avatars In Your Business (Full Guide)
That’s all for today. Please consider sharing the newsletter with your friends if you think they’d enjoy it. 🙏
-Nathan