Reports: OpenAI Negotiating $3 Billion Purchase of AI Code Assistant Codeium
Codeium, developer of the widely used AI coding assistant known as Windsurf, is reportedly discussing a potential acquisition by OpenAI valued at around $3 billion, according to Bloomberg.
Should this transaction proceed, OpenAI would enter into direct competition with several established providers of AI-driven coding assistance technology. This includes Anysphere, the creator of Cursor, a company that notably received investment from the OpenAI Startup Fund.
The potential acquisition raises questions about the integrity of the OpenAI Startup Fund, considering its position as a prominent investor in Cursor, as noted by an individual knowledgeable about Cursor’s capitalization table. Information is currently unavailable regarding whether OpenAI had previously explored acquiring Cursor.
Beyond the details shared by sources with Bloomberg, other indicators suggest activity between the two AI firms. A few days ago, Windsurf users were notified via email about an opportunity to secure access to the coding editor for $10 per month, citing an impending announcement expected later this week.
Furthermore, OpenAI’s Chief Product Officer, Kevin Weil, published a video just yesterday commending the features and performance of Windsurf’s AI technology.
Codeium had previously been in discussions to secure new investment at a $2.85 billion valuation, spearheaded by Kleiner Perkins, TechCrunch reported back in February. Based on prior reporting, the company has achieved approximately $40 million in annualized recurring revenue (ARR). This revenue figure is significantly lower than that of Cursor, which reportedly generates $200 million on an ARR basis. Cursor was also reportedly in talks to raise funds at a valuation nearing $10 billion, as Bloomberg detailed last month.
Established in 2021 by Varun Mohan and Douglas Chen, childhood friends and fellow MIT alumni, Codeium has previously secured $243 million in funding from investors including Greenoaks Capital and General Catalyst, according to data from PitchBook.