OpenAI is in advanced talks to acquire Windsurf, an AI-driven coding assistant formerly known as Codeium, for roughly $3 billion—a move that would be the company’s largest deal to date and signal a new phase of consolidation in the generative AI space. While negotiations remain fluid and subject to change, this prospective acquisition highlights the fierce competition to own developer tools powered by large language models.
Windsurf Opportunity
OpenAI’s interest in Windsurf follows the startup’s rapid rise, having generated an estimated $40 million in annual recurring revenue (ARR) by early 2025. Originally launched as Codeium, Windsurf had raised $150 million in seed funding led by General Catalyst at a $1.25 billion valuation before rebranding. The company had also explored further investment rounds with firms like Kleiner Perkins and General Catalyst at a $3 billion valuation prior to the acquisition talks. For OpenAI, integrating Windsurf could accelerate its coding capabilities and deepen its ecosystem of developer-focused offerings.
Deal Dynamics and Structure
Sources indicate that the proposed transaction would be predominantly paid in OpenAI stock, reflecting the company’s preference for equity-heavy deals amidst its current fundraising efforts. If completed, this acquisition would eclipse last year’s purchase of Rockset, an analytics startup acquired in a stock-for-stock transaction to bolster OpenAI’s enterprise infrastructure. However, the terms remain under negotiation, and either party could still walk away as discussions continue.
Strategic Implications
This move underscores a broader consolidation trend among AI leaders seeking to lock down specialized applications on top of foundational models. For OpenAI, which is backed by Microsoft and is planning a $40 billion funding round at a $300 billion valuation, securing Windsurf would both deepen its moat in the coding assistant niche and diversify its revenue streams. Moreover, the acquisition could invite antitrust scrutiny, as regulators weigh the competitive impact of such a high-profile deal in the burgeoning AI tools market.
Competitive Landscape
OpenAI’s interest in Windsurf did not materialise overnight. The company previously pursued Anysphere (maker of Cursor), another popular AI coding assistant, but those talks stalled in early 2025. Cursor boasts roughly $200 million in ARR—about five times Windsurf’s current run rate—yet OpenAI ultimately turned to Windsurf, perhaps valuing a quicker integration path or broader user base. Meanwhile, Microsoft’s Copilot continues to evolve within Visual Studio Code, intensifying the rivalry between the two art-of-the-possible coding assistants.
What for Developers in Windsurf
Should the deal close, developers can expect tighter integration of Windsurf’s autocomplete, code review, and debugging features within OpenAI’s existing tools, such as GPT-powered CLI agents. This could translate into faster code generation, more accurate suggestions, and unified billing for enterprise customers already using OpenAI’s API. Over time, we may also see deeper customization options as OpenAI opens Windsurf’s model weights and training data to its broader developer community.
Conclusion OpenAI’s $3B Bet on Windsurf
OpenAI’s $3 billion pursuit of Windsurf marks a pivotal moment in AI-driven software development—one that could reshape how developers interact with code, streamline workflows, and redraw competitive lines in the rapidly evolving landscape of generative AI tools. As negotiations proceed, all eyes will be on regulatory filings, integration roadmaps, and how the combined teams deliver on the promise of more intelligent coding assistants.