OpenAI eyes $3B buyout of AI coding tool Windsurf

When OpenAI co-founder Andrej Karpathy recently hyped up "vibe coding" on X, the tools he gave credit to were Anthropic’s Claude and Cursor. OpenAI wasn't even mentioned.

Now, Sam Altman seems ready to write a massive check to fix that.

OpenAI is in talks to acquire Windsurf, a fast-growing AI-assisted coding platform, for roughly $3 billion, according to Bloomberg and CNBC. If completed, the deal would mark OpenAI’s largest acquisition ever.

OpenAI's first choice was Cursor

Windsurf wasn't OpenAI's original target.

According to people familiar with the matter, OpenAI approached Anysphere, the startup behind Cursor, twice over the past year to discuss an acquisition. Both rounds of talks fell apart without gaining traction.

Anysphere simply outgrew the need for a buyout. The company was reportedly in talks last month to raise funding at a valuation near $10 billion. By January, Anysphere was generating over $100 million in recurring revenue, with Cursor surpassing one million daily active users in March.

With Cursor out of reach, OpenAI scouted the market aggressively. Sources say the company met with more than 20 AI coding startups before zeroing in on Windsurf.

The timing of the report is wild. On the same day the news surfaced, OpenAI rolled out its o3 and o4-mini reasoning models alongside a new Codex CLI. Cursor immediately announced support for both models inside its own editor.

Why it matters

Software development has quietly become the single most competitive and lucrative use case for frontier AI.

For developers, tools like Cursor and Windsurf have transformed daily workflows. Part of their appeal has been flexibility: developers favored Claude 3.5 Sonnet over GitHub Copilot because the editor let them use the best model available. If OpenAI buys Windsurf, expect deep, native integration of OpenAI's reasoning models directly into the editor.

For OpenAI, this is about securing the front door. Having the smartest raw models means little if users interact with them exclusively through third-party shells that default to Anthropic. Buying Windsurf gives OpenAI a permanent desktop presence right inside the programmer's environment.

We think pivoting to Windsurf for $3 billion after missing out on Cursor is a pragmatic move. Paying $10 billion for Cursor would have been a stretch, while Windsurf gives OpenAI an immediate enterprise-ready competitor.

The risk, however, is user retention. Developers have zero brand loyalty; they switch editors whenever a better autocomplete or autonomous agent appears. If OpenAI restricts Windsurf to its own models, developers may simply flock straight back to Cursor.