OpenAI Acquires Windsurf for $3 Billion, Bolstering Its Position in AI-Powered Coding Tools

OpenAI is buying Windsurf for $3 billion. What does that mean for ChatGPT?

New tools for developers may be coming to ChatGPT. Credit: Anadolu/Getty Images OpenAI is buying AI startup Windsurf for the tidy sum of $3 billion. This is according to a Bloomberg report Tuesday, which claims that the two companies have reached an agreement but that the deal "has not yet closed," with Bloomberg citing people familiar with the matter. If accurate, this would be OpenAI's largest acquisition to date. Windsurf is an artificial intelligence app that focuses on coding. Formerly known as Codeium, Windsurf is self-described as "the future of software development." Notably, the news arrived just a day after the OpenAI -- the $300 billion company, that is -- announced it would remain under control of OpenAI, the nonprofit. Perhaps even more notably, OpenAI's reported acquisition of Windsurf comes just after Anysphere, which makes the AI coding tool Cursor, reportedly raised $900 million, at a valuation of $9 billion. OpenAI's signature AI chatbot ChatGPT is already a useful tool for coding in its own right. The Pro version offers a few features aimed specifically for developers, including a code interpreter and a live editing, collaborative coding tool called Canvas. The competition, however, is strong. Anthropic, which makes AI assistant Claude, Microsoft, which owns Github, as well as Anysphere's Cursor, all offer a few of their own AI tools or features that aid programmers. This Tweet is currently unavailable. It might be loading or has been removed. Windsurf, in particular, offers Cascade, a chat-based tool that monitors your project's progress, offers suggestions, and detects issues with your code. The company also offers Windsurf Previews, which can run a preview of a website you're building, allowing you to make changes on the fly. Given that OpenAI and Windsurf declined to comment on Bloomberg's story, it's too early to tell how OpenAI plans to integrate Windsurf's capabilities, should the deal go through. We wouldn't be too surprised if tools such as Cascade and Previews make way into ChatGPT in the future, though.

Report: OpenAI is buying AI-powered developer platform Windsurf -- what happens to its support for rival LLMs?

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More OpenAI appears to be on the verge of making its biggest public acquisition to date with an agreement reached to buy Windsurf, the software developer tool powered by large language models (LLMs), to the tune of $3 billion, according to Bloomberg (unpaywalled Yahoo reprint). Rumors have swirled around such a deal for weeks, but now it appears to be happening as early as today, May 6, 2025, with Windsurf CEO and co-founder Varun Mohan posting on X last night: "Big announcement tomorrow!" According to Bloomberg, the deal is meant to "help OpenAI take on rising competition in the market for AI-driven coding assistants -- systems capable of tasks like writing code based on natural language prompting," and Windsurf had been in talks with venture capital firms to raise another round of private investment around that $3 billion valuation, up from $1.25 billion last year. The startup, formerly known as Exafunction and later Codeium, was founded in 2021 by MIT graduates Varun Mohan and Douglas Chen, initially as a "security-focused LLM toolkit that provides intelligent code suggestions in the context of the codebase," as VentureBeat reported last year. As it gained more users, its ambitions grew, culminating in the launch of the Windsurf Integrated Development Environment (IDE) in November 2024, a fork of Microsoft's Visual Studio Code, and the renaming of the company after it. Windsurf reportedly now counts more than 800,000 developer users and 1,000 enterprises as customers. It's far from the only game in town when it comes to LLM-powered IDEs and dev tools, though: OpenAI was reportedly in talks to buy another very similar and rival startup, Cursor, and there's of course Amazon's Q Developer and GitHub Copilot as well. But all are shared in their opinion that LLMs and AI models are going to change software development for the foreseeable future, writing code in the blink of an eye that would take human developers minutes, hours, or days to do manually. What will happen to Windsurf's support and offering of non-OpenAI LLMs? For users, the integration with OpenAI will undoubtedly raise questions. Part of Windsurf's appeal is that it is somewhat model agnostic, in that developers who use it can choose with LLM they want to help them write code. Right now, it offers several large language model options for its chat interface, including a custom Windsurf Base Model that's a fine-tuned variant of Meta's Llama 3.1 70B, while the Premier Model is based on Meta's larger Llama 3.1 405B and is integrated with Windsurf's internal reasoning tools to support more complex tasks, particularly in coding. Subscribers can also access external models such as OpenAI's GPT-4o and Anthropic's Claude 3.5 Sonnet, allowing for flexibility in model selection depending on the use case. Will OpenAI seek to remove the option for users to select outside LLMs and restrict them to OpenAI's model families such as GPT-4o, o3, o4, etc? We'll see, but I for one highly doubt it, given Windsurf's business has succeeded in some part based on the flexibility of its tool offerings. It would also likely raise complaints of anti-competitive business measures and could even lead to some potential lawsuits. A usage and data play meant to bolster OpenAI's models against competitors in the coding space? Instead, I would imagine that OpenAI is looking at the Windsurf acquisition as a means not only of acquiring a popular developer tool that plays well with its own models, but as a way to gather tons of user and usage data -- and from this, it could see which types of developers use rival models such as the Meta Llama variants and Anthropic's Claude, and for what purposes, and seek to ensure that new versions of OpenAI's own LLMs are competitive on these fronts. Either way, it's a "big freakin deal" -- to paraphrase former President Joe Biden -- and it will undoubtedly have many far-reaching ripple effects throughout Windsurf's entire userbase and the wider pool of developers and AI-powered dev tools. Already, Windsurf's Discord server is filled with posts from users bracing for the worst -- an increase in prices or new access tiers bundling and limiting its usage to ChatGPT subscribers or OpenAI API developers. We'll be tracking and reporting what we uncover that's useful for technical decision-makers. Stay tuned!

OpenAI to Acquire Windsurf for $3 Billion to Dominate AI Coding Space | AIM

OpenAI, the company behind the ChatGPT platform, has reached an agreement to buy AI enabled coding platform Windsurf for $3 billion, as reported by Bloomberg on Tuesday. This follows the previous reports which observed that OpenAI was 'in talks' to buy Windsurf. When the acquisition does take place, OpenAI will compete with coding platforms like Cursor, Lovable, Vercel's v0, Replit, and more. Recently, CNBC also reported that OpenAI also looked towards buying Anysphere's Cursor, before landing on Windsurf. Windsurf was launched initially as Exafunction, a GPU optimisation platform in 2021, by MIT graduates Varun Mohan, and Dogulas Chen. Given the advent of generative AI, the startup pivoted towards building a coding platform called Codeium, which eventually evolved to what is called today as Windsurf. As per Crunchbase, the company has raised over $240 million in funding. While the startup is currently valued at $1.25 billion, TechCrunch reported earlier this year that Windsurf is planning to raise a new round of funds, which will value it at $3 billion. The company also announced updates to their free tier. Cascade can now be used in write mode, users receive 5-25 Cascade prompt credits each month, and both Fast Tab and Cascade Base are available without any restrictions. The competing platform Cursor, through its parent Anysphere, has recently raised a $900 million investment, led by Thrive Capital, Andreessen Horowitz (a16z), and Accel Ventures, the Financial Times reported on Monday. This is said to more than triple the company's valuation to $9 billion. Having said that, OpenAI has increased its focus towards integrating powerful coding capabilities for users in their platforms. OpenAI mentioned that newly released o3 and o4-mini models achieve higher benchmark numbers in tests like Codeforces competition code than their predecessors, citing a 20% fewer major errors over OpenAI o1, as tested by external experts. Besides, Aider's polyglot coding leaderboard ranks o3 up at the top in terms of accuracy. While the leaderboard mentions the price being higher than Gemini, the o4-mini is still cheaper than the Claude 3.7 Sonnet, and o1.

OpenAI buys Windsurf for $3 billion

OpenAI has agreed to acquire Windsurf, an AI-assisted coding tool formerly known as Codeium, for approximately $3 billion, according to people familiar with the matter. The deal, which has not yet closed, marks OpenAI's largest acquisition to date. Windsurf, formally called Exafunction Inc., has been developing AI-driven coding assistants capable of tasks such as writing code based on natural language prompting. The company had recently been in talks with investors, including Kleiner Perkins and General Catalyst, to raise funding at a $3 billion valuation, up from its $1.25 billion valuation in a deal led by General Catalyst last year. The acquisition is seen as a strategic move by OpenAI to bolster its position in the competitive market for AI-driven coding assistants. OpenAI rivals, such as Anthropic and Microsoft Corp.-owned Github, already offer AI tools for programmers. Additionally, investors have been pouring money into startups offering similar tools, including Anysphere, the startup behind Cursor. New OpenAI guide helps users pick the right ChatGPT model OpenAI has been on a significant growth trajectory, recently finalizing a $40 billion financing led by SoftBank Group Corp., which values the company at $300 billion. The ChatGPT maker has also been navigating its corporate structure, announcing on Monday that it was walking back plans to restructure as a more conventional for-profit business after facing public pushback.

OpenAI reaches agreement to buy startup Windsurf for $3 billion

OpenAI is set to acquire Windsurf, formerly Codeium, for around $3 billion -- its largest deal yet. The acquisition may bolster OpenAI's ability to compete in the growing market for AI-powered coding assistants -- tools that can generate code from natural language instructions.OpenAI has agreed to buy Windsurf, an artificial intelligence-assisted coding tool formerly known as Codeium, for about $3 billion, according to people familiar with the matter, marking the ChatGPT maker's largest acquisition to date. The deal has not yet closed, said the people, who spoke on condition of anonymity to discuss private matters. OpenAI and Windsurf declined to comment. The acquisition could help OpenAI take on rising competition in the market for AI-driven coding assistants -- systems capable of tasks like writing code based on natural language prompting. Bloomberg News previously reported that the two companies were in discussions about an acquisition. Windsurf, formally called Exafunction Inc., had recently been in talks with investors including Kleiner Perkins and General Catalyst to raise funding at a $3 billion valuation. The company was valued at $1.25 billion in a deal led by General Catalyst last year. OpenAI rival Anthropic and Microsoft Corp.-owned Github both offer AI tools for programmers. Investors have also poured money into a new crop of startups offering similar tools, including Anysphere, the startup behind Cursor. OpenAI recently finalized a $40 billion financing led by SoftBank Group Corp., which values the company at $300 billion. On Monday, OpenAI said it was walking back plans to restructure as a more conventional for-profit business after facing public pushback.

Microsoft-Backed OpenAI To Snap Windsurf For $3 Billion To Strengthen AI Coding Power: Report - Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META)

Feel unsure about the market's next move? Copy trade alerts from Matt Maley -- a Wall Street veteran who consistently finds profits in volatile markets. Claim your 7-day free trial now. ChatGPT parent OpenAI has agreed to buy Windsurf for about $3 billion, Bloomberg reported Tuesday citing unnamed sources familiar with the matter. Windsurf is an artificial intelligence-assisted coding tool formerly known as Codeium. The acquisition could help Microsoft Corp MSFT backed OpenAI take on competition in the market for AI-driven coding assistants. Also Read: OpenAI And SoftBank's Stargate Considers Major UK Investment To Fuel AI Growth Windsurf, formerly Exafunction Inc., recently discussed raising funding at a valuation of $3 billion with investors. On Monday, Sam Altman led OpenAI shared its pivot from transitioning fully to a public benefit corporation following legal pressure and investor concerns. OpenAI CEO Sam Altman emphasized that OpenAI was founded as a nonprofit, but it is today a nonprofit that oversees and controls the for-profit, and will remain a nonprofit going forward. OpenAI will continue working with Microsoft, regulators, and nonprofit commissioners to finalize its plans to retain its nonprofit parent's control over its for-profit operations. OpenAI recently finalized a $40 billion financing led by SoftBank Group Corp SFTBF SFTBY at a valuation of $300 billion. OpenAI and its rivals faced stiff competition from a Chinese AI startup, DeepSeek, which claimed to develop competitive AI models at a fraction of the cost. Meta Platforms, Inc. META and Microsoft Corp's MSFT upbeat quarterly financial results have been instrumental in easing investor tensions over the sustainability of AI investments. Read Next: Microsoft Plans Proprietary AI To Power Business Software And Reduce OpenAI Dependence: Report Photo Courtesy: Meir Chaimowitz via Shutterstock METAMeta Platforms Inc$592.64-1.11%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum85.36Growth75.93Quality-Value43.01Price TrendShortMediumLongOverviewMSFTMicrosoft Corp$433.93-0.51%SFTBFSoftBank Group Corp$52.45-0.47%SFTBYSoftBank Group Corp$26.14-0.59%Market News and Data brought to you by Benzinga APIs

OpenAI agrees to buy AI coding assistant Windsurf for $3 bln- Bloomberg By Investing.com

Investing.com-- OpenAI agreed to buy artificial intelligence coding tool Windsurf for about $3 billion just weeks after reportedly being in talks over the deal, Bloomberg reported on Monday, citing people familiar with the matter. The acquisition is OpenAI's biggest to date, but has not yet closed, Bloomberg reported. Reports in April had shown the AI startup was in talks to buy Windsurf, which was formerly known as Codeium. But the reports had also flagged some concerns over the acquisition, given that it could put OpenAI in direct competition with several other AI coding assistant providers, many of which are backed directly by OpenAI's Startup Fund. Monday's report comes just hours after OpenAI said it will dial back plans to restructure into a for-profit company, as the AI startup faces a storm of criticism and legal challenges over the move. Most notable of these is a high-profile lawsuit from co-founder Elon Musk. The Microsoft (NASDAQ:MSFT) and Softbank-backed AI startup is among the most valuable private companies in the world, and is at the heart of an AI boom over the past two years.