OpenAI Nears $3 Billion Acquisition of AI Coding Startup Windsurf

By Fumi Nozawa

Windsurf, the developer behind a widely-used AI-powered coding assistant, is currently in acquisition discussions with OpenAI for approximately $3 billion, according to a Bloomberg report. The potential deal could be announced as early as this week.

This strategic move would position OpenAI against established players in the AI coding assistant market, including Anysphere, creator of the Cursor platform. Interestingly, OpenAI previously invested in Cursor through its Startup Fund, raising questions about potential conflicts of interest. Industry sources suggest this acquisition could undermine the credibility of OpenAI’s investment arm, though it remains unclear whether OpenAI considered acquiring Cursor instead.

Several indicators point to imminent developments between the two companies. Windsurf recently notified users about an upcoming announcement, offering them the chance to secure continued access to their coding editor at $10 per month. Additionally, OpenAI’s Chief Product Officer Kevin Weil publicly praised Windsurf’s technology in a recent video presentation.

Formerly known as Codeium, Windsurf was reportedly negotiating a funding round at a $2.85 billion valuation earlier this year, led by Kleiner Perkins. The company currently generates about $40 million in annual recurring revenue – significantly less than Cursor’s reported $200 million ARR. Windsurf’s financial backers include prominent firms like Greenoaks Capital and General Catalyst, having raised $243 million since its 2021 founding by MIT graduates Varun Mohan and Douglas Chen.