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OpenAI agreed to acquire Windsurf, an artificial intelligence (AI)-assisted coding platform formerly known as Codeium, for $3 billion. The deal marks OpenAI’s largest acquisition yet and changes the competitive landscape for AI coding tools.
The acquisition comes as Windsurf was exploring a funding round at the same $3 billion valuation with investors including Kleiner Perkins and General Catalyst. The agreement has been reached but not yet closed, with both companies declining to comment, according to Bloomberg.
Windsurf CEO and co-founder Varun Mohan hinted at the news Monday night, posting on X: “Big announcement tomorrow!” The company, founded in 2021 by MIT graduates Mohan and Douglas Chen, started as a “security-focused LLM toolkit” before expanding its ambitions.
The deal represents a strategic shift in how AI companies compete. Rather than focusing solely on developing superior models, OpenAI is now attempting to control key parts of the AI developer ecosystem.
“With Windsurf’s potential acquisition, OpenAI can corner a lion’s share of AI-driven coding platforms market for its base OpenAI Codex… This will definitely affect Anthropic’s share in this space,” said Neil Shah, VP for research at Counterpoint Research.
Sanchit Vir Gogia, CEO at Greyhound Research, called the move “a new chapter in OpenAI’s enterprise push”. He added that for OpenAI, this move is about building a developer experience that reduces dependency on Microsoft’s infrastructure.
Competition in AI coding tools has intensified with Microsoft’s GitHub Copilot and Anysphere’s Cursor securing major funding. OpenAI likely sees Windsurf as key to competing in enterprise software development.
Windsurf currently boasts over 800,000 developer users and 1,000 enterprise customers. Its specific tools include Cascade, a chat-based code monitoring system, and Previews, which enables live website editing.
The timing is notable, coming just after OpenAI walked back plans to restructure as a more conventional for-profit business following public pushback. The company recently finalized a $40 billion financing round led by SoftBank Group, valuing OpenAI at $300 billion.
For users, a key question remains about model choice. Part of Windsurf’s appeal is its model-agnostic approach, letting developers choose which large language model helps them write code. Current options include a Windsurf Base Model (a fine-tuned variant of Meta’s Llama 3.1 70B), OpenAI’s GPT-4o, and Anthropic’s Claude 3.5 Sonnet.
The tech world now watches whether OpenAI will maintain Windsurf’s support for rival models or restrict users to its own AI offerings, a decision with potential antitrust implications.
