OpenAI is in advanced negotiations to acquire Windsurf, the maker of a fast-growing AI coding assistant, in a deal valued at roughly $3 billion, according to a report from Bloomberg.
The acquisition, if finalized, would thrust OpenAI deeper into the competitive world of developer-focused AI tools—putting it in direct rivalry with companies like Anysphere, the startup behind Cursor. Notably, OpenAI is a major backer of Cursor through its Startup Fund, raising eyebrows across the industry about potential conflicts of interest.
Signs Are Already Showing
Though OpenAI has yet to confirm the acquisition, signs have emerged in recent days that a major announcement is imminent. Windsurf sent an email to users earlier this week offering the chance to lock in access to its AI coding editor for $10/month, citing an update coming later in the week.
Adding fuel to the speculation, OpenAI Chief Product Officer Kevin Weil released a video on Tuesday publicly praising Windsurf’s capabilities—an unusual move that industry watchers saw as a soft endorsement ahead of news breaking.
Inside the Numbers: Windsurf vs. Cursor
Formerly known as Codeium, Windsurf has been in talks to raise a funding round at a $2.85 billion valuation, led by Kleiner Perkins, TechCrunch reported in February. The startup has reached roughly $40 million in annualized recurring revenue (ARR), a solid figure but far below Cursor’s estimated $200 million ARR.
Cursor, for its part, is reportedly in discussions to raise new funding at a $10 billion valuation, according to a March report by TechCrunch.
A Startup on the Rise
Windsurf was founded in 2021 by MIT graduates Varun Mohan and Douglas Chen, childhood friends who have since raised $243 million from top-tier investors including Greenoaks Capital and General Catalyst, per PitchBook.
If OpenAI’s acquisition goes through, it would mark a significant consolidation play in the fast-moving world of AI developer tools—one that could reshape the competitive landscape and raise thorny questions about OpenAI’s dual roles as both investor and acquirer.
Sources: Bloomberg, TechCrunch (Feb), TechCrunch (Mar), YouTube
