this reminds me when early on in Github Copilot journey when people were asking "what if it accidentally reproduces GPL code and I get sued" and Microsoft said they'll cover the legal costs for anyone using Github Copilot.

The big players (Google, Microsoft, Meta, Nvidia) don't want ai startups failing. In fact they are terrified of that. Can you imagine the market shock if windsurf just went under in 1 year. How fearful all investors would be? How the whole market is gonna react? We are told that AI is basically a money printer. If you release a product for $20/month and a couple of months later other companies (with much better margins by definition) release competitor for $250 then $300 then $400 something is clearly not adding up even among the higher numbers.

The way VC investments work is that it's all very incestuous. Google, MS, etc. have lots of money in VC funded AI startups. Instead of letting them fail the hard way, they usually fail in a soft way via mergers, acquihires, etc.

Mostly when you read about a big company buying a small startup, it's actually an investor bail out. The company has technically failed and the investors basically want to get rid of the failing company in a way that doesn't make them look like muppets. So there's a nice press release, an undisclosed share swap, and tada another successful exit .. of a company and technology that you will never hear from again. This is nothing new. This is what happens to most startups that don't IPO.

Codium was alright a few years ago but by now it's a commodity. Amazing idea of having a little side bar in VS code with a bare bones chat UI that you could hookup to your openAI API key. They build bits and pieces of tech with some merit to it since then of course. But nothing that cannot and is not being replicated by others. Same with Cursor, windsurf and all the other niche players in this market. None of these companies has much of a moat.

And at this point all the big companies have their in house built solutions: Claude Code, Google has Julius, OpenAI has codex, MS has co-pilot, AWS recently launched their own thing. Clearly building these things is not that hard. All the IP is in the models and infrastructure.

So like crypto bubble with extra steps

Yep. And what happens next if Cursor goes under? I don't think the big ones let that happen, even though the business is not profitable.