OpenAI is buying artificial intelligence (AI)-assisted coding tool Windsurf, formerly known as Codeium, for about $3 billion in its largest acquisition to date.
The long-rumored deal, reported by Bloomberg News on Monday, should significantly boost ChatGPT’s coding functionality as well as put OpenAI in position to more effectively compete in the fledgling market for AI-powered coding assistants, tools capable of writing code based on natural language prompts. OpenAI has been steadily rolling out upgrades in coding with the release of each of its newer models.
The Pro version of ChatGPT, OpenAI’s signature AI chatbot, includes features specifically for developers such as a code interpreter and a live editing, collaborative coding tool called Canvas.
OpenAI and Windsurf had no comment on an imminent agreement. But in a post on social media platform X Monday night, Windsurf CEO Varun Mohan said, “Big announcement tomorrow!”
The anticipated acquisition occurred as Windsurf — self-described as “the future of software development” — was reportedly in talks with venture-capital firms Kleiner Perkins and General Catalyst to raise funding at a $3 billion valuation, according to Bloomberg. In August, the 4-year-old company was valued at $1.25 billion after a $150 million funding round led by General Catalyst.
“The acquisition of Windsurf by foundational AI LLM company OpenAI marks a pivotal convergence point in the hotly contested and rapidly growing AI-powered software development tool markets,” The Futurum Group analysts Mitch Ashley and Nick Patience said in a research note on Wednesday. “Cursor and Windsurf are the innovation leaders as the software development industry transitions from traditional software development methods and tools to AI-native, where generative AI, natural language, and agentic agents increasingly take on development tasks performed by developers today.”
The latest, and largest, purchase by OpenAI comes during a recent flurry of acquisitions in recent years to fortify its AI products as the market — and competition — reaches a fevered pitch. Last year, the Sam Altman-led company bought Rockset, a search and database analytics startup, in a nine-figure stock deal to improve infrastructure for its enterprise products.
Coding remains a top priority and competitive worry for OpenAI, which is being contested for programmers by Anthropic, which makes AI assistant Claude; Microsoft Corp., which owns Github; and Anysphere’s Cursor. The latter has reportedly raised $900 million, at a valuation of $9 billion.
OpenAI is planning to raise as much as $40 billion in a new funding round led by SoftBank Group at a $300 billion valuation. It now boasts more than 400 million weekly active users, up from 300 million in December.
