OpenAI may Acquire Windsurf for $3B Soon
OpenAI is reportedly in talks to acquire Windsurf, a fast-growing AI coding assistant company, for about $3 billion, according to Bloomberg. If confirmed, the deal could be announced this week. It would significantly reshape the competitive landscape of AI development tools.
Implications for the Startup Ecosystem
If the deal goes through, OpenAI would compete directly with other coding tool makers, especially Anysphere, the company behind Cursor. Cursor, notably, is backed by OpenAI’s own Startup Fund. This overlap adds complexity. Acquiring Windsurf could raise questions about OpenAI’s impartiality and the ethics of its investment decisions.
A person familiar with Cursor’s cap table suggested the deal might damage the fund’s credibility. Interestingly, there’s no indication that OpenAI ever approached Cursor with a similar offer.
There are also signs that something major is in the works. Windsurf recently emailed users, offering them a chance to lock in a $10-per-month subscription ahead of an announcement. In addition, OpenAI Chief Product Officer Kevin Weil posted a video praising Windsurf’s capabilities. That public endorsement added fuel to speculation.
Growth Trajectory and Market Context
Windsurf, previously known as Codeium, was reportedly raising new funds at a $2.85 billion valuation, led by Kleiner Perkins. The company has reached about $40 million in annualized recurring revenue (ARR). While solid, that figure is far behind Cursor’s $200 million ARR.
Cursor, in fact, has been seeking funding at a $10 billion valuation. Windsurf’s smaller revenue hasn’t dimmed investor enthusiasm, though. Founded in 2021 by MIT alumni Varun Mohan and Douglas Chen, it has raised $243 million from Greenoaks Capital and General Catalyst, according to PitchBook.
If OpenAI completes the acquisition, it could reshape its role in developer tools. It may also set a precedent for how investment arms handle rivalries within their own portfolios.
