OpenAI Moves to Acquire AI Coding Startup Windsurf in Landmark $3 Billion Deal
In a strategic move to expand its influence in the AI-powered software development market, OpenAI has entered an agreement to acquire coding tool Windsurf for approximately $3 billion. If completed, the deal will mark OpenAI’s largest acquisition to date and is expected to significantly enhance the coding capabilities of ChatGPT. While the acquisition has yet to close, insiders have confirmed its advanced stage, underscoring OpenAI’s ambition to dominate the increasingly competitive landscape of generative AI tools.
Windsurf, formerly known as Exafunction and later Codeium, has built a reputation for creating tools that enable developers to write and debug code using natural language. The company has experienced rapid growth, fueled by the rising demand for AI-assisted productivity in software engineering. With backing from investors such as General Catalyst, Kleiner Perkins, and Greenoaks, Windsurf reached a valuation of $1.25 billion in 2023 and was reportedly seeking funding at a $3 billion valuation—the same figure reported for the OpenAI deal.
The acquisition comes as OpenAI intensifies its push beyond text generation. In 2024, the company acquired Rockset to bolster its data infrastructure, and it continues to build enterprise solutions on top of its foundational models. OpenAI has also witnessed explosive user growth, crossing 400 million weekly active users earlier this year. However, the company’s rising operating costs—expected to hit $28 billion in 2025—have prompted a push to diversify revenue streams and scale new commercial offerings.
This latest move aligns with broader industry trends. The AI-assisted coding market is projected to nearly triple in size—from $4.3 billion in 2023 to $12.6 billion by 2028—as developers increasingly adopt generative AI tools to boost productivity. OpenAI, whose technology also powers GitHub Copilot, is now positioning itself to capture more of this momentum by acquiring and integrating specialized development tools like Windsurf into its platform.
With major tech firms like Microsoft, Amazon, Google, and IBM competing in the space, OpenAI’s acquisition underscores the escalating race to dominate AI-driven development tools. The company is also preparing for a major funding round, potentially led by SoftBank, which could value OpenAI at $300 billion. If the Windsurf deal closes successfully, it would not only strengthen OpenAI’s product suite but also reinforce investor confidence in the future of AI-enhanced software development.
Source: Nairametrics