OpenAI to Acquire Windsurf for $3 Billion - Report

OpenAI Reportedly in Discussions to Acquire Windsurf

Windsurf, the developer of a widely-used AI coding assistant, is currently engaged in negotiations regarding a potential acquisition by OpenAI. Reports from Bloomberg indicate the deal could be valued at approximately $3 billion.

Potential Competition and Fund Implications

Should this acquisition be finalized, OpenAI would find itself in direct competition with other providers of AI coding assistance. This includes Anysphere, the company behind Cursor, which has previously received backing from OpenAI's Startup Fund.

A source with knowledge of Cursor's financial structure suggests the acquisition could raise questions about the credibility of the OpenAI Startup Fund, considering its significant investment in Cursor. It remains unconfirmed whether OpenAI directly approached Cursor regarding a possible acquisition.

Recent Developments and Signals

Beyond the information shared with Bloomberg, several recent events hint at ongoing discussions between the two companies. Windsurf users recently received an email offering the option to secure continued access to the coding editor for a monthly fee of $10, citing an upcoming announcement.

Furthermore, Kevin Weil, OpenAI's Chief Product Officer, recently published a video highlighting the capabilities of Windsurf.

Financial Context and Company Background

Previously known as Codeium, Windsurf was reportedly exploring a new funding round at a $2.85 billion valuation, led by Kleiner Perkins, as reported by TechCrunch in February. The company has achieved an annualized recurring revenue (ARR) of around $40 million.

This revenue figure is notably lower than that of Cursor, which is said to generate $200 million in ARR. Cursor was also in discussions to secure funding at a valuation of approximately $10 billion, according to Bloomberg’s reporting last month.

Funding History

Founded in 2021 by Varun Mohan and Douglas Chen, both MIT graduates and long-time friends, Windsurf has secured $243 million in funding from investors including Greenoaks Capital and General Catalyst, as per PitchBook data.

Additional reporting by Sarah Perez