OpenAI is making big moves in the AI coding space once again. The company is reportedly deep in talks to acquire Windsurf, an AI-powered coding assistant formerly known as Codeium, for over $3 billion. If the deal goes through, it would be OpenAI’s most expensive acquisition to date, signaling just how high the stakes are in the fast-growing world of code-generation tools.
Interestingly, this development follows failed acquisition talks between OpenAI and Anysphere, the team behind Cursor, a coding assistant that’s gained massive popularity among developers. OpenAI had initially invested in Anysphere through its Startup Fund during the company’s seed round in late 2023. Sources say OpenAI approached Anysphere twice in 2024 with acquisition offers, but discussions didn’t move forward. Instead, Anysphere is now reportedly in the process of raising a new funding round at a $10 billion valuation, a figure that reflects its rapid rise and strong market traction.
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Cursor, Anysphere’s flagship product, has exploded in popularity, reaching over $100 million in annual recurring revenue (ARR) within less than two years of launch. Some insiders claim it’s the fastest-growing SaaS company ever in the developer tooling space. This level of success has made Cursor a key player and likely too expensive or independent for OpenAI to easily acquire now.
Meanwhile, Windsurf, the likely acquisition target, has a smaller but solid footprint, with $40 million in ARR. It raised a hefty $150 million funding round not long ago at a $1.25 billion valuation, making the rumored $3 billion acquisition price a significant premium. This suggests OpenAI isn’t just buying revenue, it’s betting on Windsurf’s technology, talent, and potential to expand its ecosystem of AI tools for developers.
OpenAI already has its own tools in the space, like Codex and the newly released Codex CLI, which helps developers write and edit code from the command line. But it seems the company isn’t content to wait for organic growth. Instead, it’s aggressively pursuing strategic acquisitions to solidify its dominance, especially as competition intensifies from Microsoft’s GitHub Copilot and other emerging players.
AI coding assistants are no longer experimental novelties; they’re becoming must-have tools in modern development workflows. Whether it’s helping write boilerplate, debug logic, or automate entire tasks, these tools are transforming how software gets built. And with billions now pouring into the space, OpenAI’s latest movies show it’s willing to pay top dollar to stay ahead.
