Desperate pivot aside, I don't see how anyone competes with the big labs on coding agents. They can serve the models at a fraction of the API cost, can trivially add post training to fill gaps and have way deeper enterprise penetration.
The differentiator is the fact that the scaling myth was a lie. The GPT-5 flop should make that obvious enough. These guys are spending billions and can't make the models show more than a few % improvement. You need to actually innovate, e.g. tricks like MoE, tool calling, better cache utilization, concurrency, better prompting, CoT, data labeling, and so on.
Not two weeks ago some Chinese academics put out a paper called Deep Think With Confidence where they coaxed GPT-OSS-120B into thinking a little longer causing it to perform better on benchmarks than it did when OpenAI released it.
Scaling inference not training is what OP means I believe .
The smaller startups like cursor or windsurf are not competing on foundational model development. So whether new models are generationally better is not relevant to them.
A cursor is competing with Claude code and both use Claude Sonnet.
Even if Cursor was running a on par model on their own GPUs their inference costs will not as cheap as those of Anthropic just because they would not be operating at the same scale . Larger DCs means better deals, more knowledge about running an inference better because they are also doing much larger training runs.
Don't need to compete - demonstrate some ability to use AI in an easy to understand way, get bought out at valuation. Bad for investors, awesome for founders.
I've pitched people working there this multiple times. Warp is not just a terminal, it's a full stack of interaction, they have more of the vertical of the development cycle to leverage.
You need different relationships at different parts of coding, ideation, debugging, testing, etc. Cleverly sharing context while maintaining different flows and respecting the relationship hygiene is the key. Most of the vscode extensions now do this with various system prompt selections of different "personas".
I used to (6 months ago) compare these agentic systems basically as if they were John Wayne as contract programmer, parachuting in a project, firing off their pistol, shooting the criminals, mayor, and burning the barn down all the while you're yelling at it to behave better.
There's contexts and places where this can be more productive. Warp is one of them if executed with clean semantic perimeters. It's in a rather strong positioning for it and an obvious loyalty builder
Sometimes worse is better. I haven't used it a lot yet, but so far I quite like this reduced focus on editing - I see this as close to the sweet spot of vibe coding, in between Claude Code and a full editor/IDE, whereby I generally trust the agent to right the code, but just want a simple editor to steer it more effectively.
I see this similarly to the way I would have a work session with a more junior dev where sometimes during the chat I would "drop down in abstraction" to show them how I'd code a specific function, but I don't want to take over - I'm giving them a bit of direction, and it's up to them to either keep my code or ignore/rewrite it to better suit their approach.
I get that it’s a different mode, but if you ever drop into editing, why would you ever want a worse (or just unfamiliar) editor? How does that improve the agent mode? If my junior dev only had Notepad installed, I would get them to install a better editor, I wouldn’t say “it’s great you only have Notepad, so we can focus on our conversation”.
For me, the USP Warp used to have was generating shell commands from prompts inside the terminal - but Cursor has had this in its embedded terminal for a while now so increasingly I find myself using Ghostty instead
this concerns me given what I've seen generated by these tools. In 10? 5? 1? year(s) are we going to see an influx of CVEs or hiring of Senior+ level developers solely for the purpose of cleaning up these messes?
Insofar as CVEs issued for proprietary software, I would expect that the owning organization would not be inclined to blame AI code unless they think they can pass the buck.
But as for eventually having to hire senior developers to clean up the mess, I do expect that. Most organizations that think they can build and ship reliable products without human experts probably won’t be around long enough to be able to have actual CVEs issued. But larger organizations playing this game will eventually have to face some kind of reckoning.
Looking at the other side of the coin, I'm hoping that the proliferation of unsafe code would lead to more investment in vulnerability testing tooling, and particularly in reducing false positives by generating potential exploits. Having better security testing would be a massive boon to the industry regardless of whether we use AI to write the code.
I switched to this and honestly, more or less feels the same as claude code except with a fancy UI and built-in mcp servers for automated memory management. But I am sticking to it so I don't have to deal with vendor lockin (I heavily disagree with what antrophic is doing when it comes to 'safety')
The difference to me is that I can quickly switch in and out of “AI mode” with Warp. So it’s a terminal when I want that, and it’s an AI assistant when I want that.
With Claude Code, you’re stuck in AI mode all the time (which is slow for running vanilla terminal commands) or you have to have a second window for just terminal commands.
Edit: just read some documentation saying Claude has a “bash mode” where it will actually pass through the commands, so off to try that out now.
All these monolithic agents are so wasteful. Having an agent orchestration service is so much more efficient and maintainable. My work in progress rust agent takes less cpu/memory for a whole swarm than one claude code instance.
My rust agent is closed source (at least right now, we'll see) but I'm happy to discuss details of how stuff works to get you going in the right direction.
I'm using the swarm to build ~20 projects in parallel, some released even, and some draft papers done. Take a look at the products gallery on my site (research papers linked on the research tab): https://sibylline.dev/products/
Claude Code and Codex provide something like $5000 of tokens for $200. How will any other offering depending on their models ever compete with that except by luring suckers or tire kickers?
The pivot is likely because there's more VC dollars there.
It is a handy AI-cli for any terminal. I've been using the "terminal" app for a few months and found it was a very competent coding tool. I kept giving feedback to the team that they should "beef up" the coding side because until Claude Code this was my daily driver for writing code until Opus 4. The interface still is a bit janky because i think it's trying to predict whether you're typing a console command or talking to it for new prompt (it tries to dynamical assess that but often enough it crosses the streams). Regardless, I highly recommend checking it out, I've had some great success with it.
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Things like self hosting and data privacy, model optionality too.
Plenty of companies still don’t want to ship their code, agreement or not over to these vendors or be locked into their specific model.
The differentiator is the fact that the scaling myth was a lie. The GPT-5 flop should make that obvious enough. These guys are spending billions and can't make the models show more than a few % improvement. You need to actually innovate, e.g. tricks like MoE, tool calling, better cache utilization, concurrency, better prompting, CoT, data labeling, and so on.
Not two weeks ago some Chinese academics put out a paper called Deep Think With Confidence where they coaxed GPT-OSS-120B into thinking a little longer causing it to perform better on benchmarks than it did when OpenAI released it.
The smaller startups like cursor or windsurf are not competing on foundational model development. So whether new models are generationally better is not relevant to them.
A cursor is competing with Claude code and both use Claude Sonnet.
Even if Cursor was running a on par model on their own GPUs their inference costs will not as cheap as those of Anthropic just because they would not be operating at the same scale . Larger DCs means better deals, more knowledge about running an inference better because they are also doing much larger training runs.
Reference: Browser Company
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You need different relationships at different parts of coding, ideation, debugging, testing, etc. Cleverly sharing context while maintaining different flows and respecting the relationship hygiene is the key. Most of the vscode extensions now do this with various system prompt selections of different "personas".
I used to (6 months ago) compare these agentic systems basically as if they were John Wayne as contract programmer, parachuting in a project, firing off their pistol, shooting the criminals, mayor, and burning the barn down all the while you're yelling at it to behave better.
There's contexts and places where this can be more productive. Warp is one of them if executed with clean semantic perimeters. It's in a rather strong positioning for it and an obvious loyalty builder
(2) A Microsoft VP of product spends enough time writing code to be a relevant testimonial?
I see this similarly to the way I would have a work session with a more junior dev where sometimes during the chat I would "drop down in abstraction" to show them how I'd code a specific function, but I don't want to take over - I'm giving them a bit of direction, and it's up to them to either keep my code or ignore/rewrite it to better suit their approach.
this concerns me given what I've seen generated by these tools. In 10? 5? 1? year(s) are we going to see an influx of CVEs or hiring of Senior+ level developers solely for the purpose of cleaning up these messes?
But as for eventually having to hire senior developers to clean up the mess, I do expect that. Most organizations that think they can build and ship reliable products without human experts probably won’t be around long enough to be able to have actual CVEs issued. But larger organizations playing this game will eventually have to face some kind of reckoning.
With Claude Code, you’re stuck in AI mode all the time (which is slow for running vanilla terminal commands) or you have to have a second window for just terminal commands.
Edit: just read some documentation saying Claude has a “bash mode” where it will actually pass through the commands, so off to try that out now.
Why suddenly agentic coding?
It is a handy AI-cli for any terminal. I've been using the "terminal" app for a few months and found it was a very competent coding tool. I kept giving feedback to the team that they should "beef up" the coding side because until Claude Code this was my daily driver for writing code until Opus 4. The interface still is a bit janky because i think it's trying to predict whether you're typing a console command or talking to it for new prompt (it tries to dynamical assess that but often enough it crosses the streams). Regardless, I highly recommend checking it out, I've had some great success with it.