OpenAI has reportedly purchased AI startup Windsurf for $3 billion after weeks of speculation over a looming acquisition.
In April, reports suggested OpenAI was in talks with the AI coding tool developer on a $3bn deal, which would mark the company’s largest acquisition to date.
Reports from Bloomberg suggest the deal has been agreed but not fully closed, hence the lack of formal announcement or confirmation from either company.
Notably, separate reports suggested OpenAI had previously considered buying a rival coding assistant, having spoken to more than 20 different companies.
Anysphere, the company behind Cursor, reportedly held early discussions with OpenAI on a potential acquisition, but walked away because it would prefer to remain independent.
Cursor gained attention in February after OpenAI co-founder Andrej Karpathy pointed to its potential for "vibe coding", or using AI to write code.
Everything you need to know about Windsurf
Formerly known as Codeium, Windsurf is an AI-powered coding tool. The company's website describes two main tools: Autocomplete, which suggests code as you type, and Search, which helps find anything in a repository using natural language.
"With easy integration into editors, we want you to focus on being the best software developer, not the best code monkey,” the company claims.
Windsurf says the tool is enabled by default for a wide range of languages, and can be enabled for any others.
The tool is currently free for individual developers, though Windsurf charges for additional functionalities as part of its Pro, Teams, and Enterprise paid tiers.
This includes more advanced versions of Autocomplete — called "Supercomplete" and "Fast Autocomplete" — and unlimited usage AI models including OpenAI's own GPT-4o, as well as Anthropic's Claude 3.5 Sonnet.
Windsurf claims to have "similar industry-leading latency and quality" on code autocomplete as tools such as GitHub Copilot.
Last year, the company was valued at $500 million following a financing round worth $65 million. The company was founded in Mountain View, California in June 2021 by Douglas Chen and Varun Mohan, the latter of whom currently serves as CEO.
A boon for AI software engineers?
The effort to procure an AI coding company reveals the importance of this area to developers, with coding seen as a genuinely valuable use for generative AI. A survey by GitHub last year suggested the vast majority of coders — a whopping 97% — had used AI coding tools at work, whether their employer knew it or not.
While Meta has said it plans to begin replacing software engineers with AI systems this year, at the same time the world's first AI software engineer was found to not be totally living up to expectations.
OpenAI has been keen to promote its model ranges as a leading option for developers dabbling in AI, but recent events show it’s not quite up to the same level as competitors on this front.
Backlash security testing of seven models for vibe coding skills, for example, found OpenAI's GPT-4o was the worst performer when ranked against other leading industry models, such as Anthropic’s Claude 3.7 Sonnet.
OpenAI and Windsurf have yet to respond to a request for confirmation of the deal by IT PRO.
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