The AI Coding Revolution: Why 95% of New Code is Written by AI
Superthread founder David breaks down the latest AI shifts: OpenAI’s Windsurf acquisition, the rise of 'vibe coding,' and why AI-augmented developers are 5x more productive.
TAI Strategy and the Death of ‘Lazy’ Search
There’s been some new developments in the world of AI, and I’m going to talk about them in no particular order.
It turns out that Google has been paying its AI employees a year’s worth of salary to do nothing just so that they don’t go to their competition. This is really telling because Google has been really struggling in terms of the consumer market. OpenAI is really dominant in this field, and the reason for all of this is because Google was initially lazy and they were late to the party.
OpenAI has really established itself as the go-to consumer app for AI. If you just look around you in the office, you’ll see that no one’s really using Google; the majority of people are using OpenAI Search. Google’s in trouble there, too, though, of course, they still have YouTube, which is big.
The $3 Billion Race for the AI Code Editor
OpenAI is looking to acquire Windsurf for $3 billion. Windsurf is a coding app that uses AI to help you code, similar to Cursor AI. It’s the second biggest player in the space; OpenAI was originally interested in acquiring Cursor, but that didn’t happen.
To put the numbers in perspective:
- Cursor AI: Valued at roughly $30B, making $1B in annualized revenue.
- Windsurf: Being acquired for $3B, making around $40M–$100M in ARR.
As a user of Cursor AI, I can tell you that it has completely and utterly transformed the way programmers code. So much so that in the latest batch of Y Combinator companies, it turns out that 95% of the code written for the apps they were demoing was written using AI.
Augmented Development and ‘Vibe Coding’
As a developer originally, we thought we’d be the last to have our jobs taken by AI, but it turns out that AI is taking our jobs first. But what’s actually happening, or what I’m seeing personally, is that AI is augmenting developers massively.
‘I’m able to produce five times the output compared to before, or even more actually in some cases. On the whole, it’s a good thing.’
I do think it’s tough for junior developers because this kind of ‘vibe coding’ is interesting, but you can’t be that precise with it yet. But if you know what you’re doing, if you have exposure to programming and how systems fit together, it is particularly good for you.
The Myth of the One-Person Billion-Dollar Company
There’s been talk of one-person billion-dollar companies. I don’t think that’s going to happen. If one person is able to create a billion-dollar company, then because one person created it, it is not very defensible. It’s very much copiable. It remains to be seen, but in my opinion, I doubt it.
Politeness, Server Costs, and the Future of Work
Interesting side note from Twitter: someone was joking about saying ‘thank you’ and ‘please’ to ChatGPT. Apparently, it costs tens of millions in energy and server costs when people do that. But people are doing it anyway, they’re hedging their bets. They want to be polite to these systems before they become intelligent and take over.
On a more serious note, there is concerning news out of Germany. A major company, employing around 160,000 underwriters, was approached by an AI firm claiming they could replace the entire workforce within six months. The company chose not to go for it because they didn’t want to cause a national recession. That is a massive signal of where things are headed.
Anyway, I hope you guys enjoy this latest update.
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