AI coding startup Windsurf is facing significant gross margin pressures, reportedly operating with "very negative" margins. This financial strain is believed to be impacting other "vibe coding tools" such as Cursor, Lovable, and Replit. The situation comes after Windsurf was reportedly in discussions for a substantial funding round at a $2.85 billion valuation led by Kleiner Perkins. The negative margins raise concerns about the sustainability and profitability of these AI-assisted coding platforms.