OpenAI is reportedly in advanced discussions to acquire Windsurf—developer of a popular AI coding assistant editor—in a deal valued around $3 billion. The potential acquisition, first reported by Bloomberg, would mark a significant move into the competitive space of AI-powered development tools.
If finalized, the deal would place OpenAI in direct competition with several other AI coding assistant startups—most notably Cursor, built by Anysphere, a company OpenAI itself backed via its Startup Fund.
A Conflict of Interest?
The potential acquisition has already sparked concern among industry observers and insiders. One person familiar with Cursor’s cap table noted that the deal could undermine the credibility of the OpenAI Startup Fund, considering it is one of Cursor’s major investors. It remains unclear whether OpenAI ever made an acquisition offer to Cursor.
Tensions around the deal may be further fueled by the growing rivalry between Cursor and Windsurf. Cursor reportedly has a higher annual recurring revenue (ARR) of $200 million, compared to Windsurf’s $40 million ARR. Cursor has also been in talks to raise funds at a $10 billion valuation, according to Bloomberg.
Signs Pointing to a Deal
Recent developments hint that something major is underway. A few days ago, Windsurf users received an email offering them a chance to lock in the editor at $10/month, citing an “announcement later this week.” Meanwhile, OpenAI Chief Product Officer Kevin Weil released a video praising Windsurf’s technology, further fanning acquisition rumors.
From Codeium to Windsurf
Founded in 2021 by MIT alumni Varun Mohan and Douglas Chen, Windsurf—formerly known as Codeium—has grown rapidly in a crowded field. The company has raised $243 million from investors including Greenoaks Capital and General Catalyst, according to PitchBook data.
Earlier this year, TechCrunch reported that Windsurf was seeking new funding at a $2.85 billion valuation, led by Kleiner Perkins.
Whether this acquisition materializes or not, it raises pressing questions about how OpenAI balances its role as both an investor and a competitor in the AI development ecosystem.
