OpenAI is set to acquire AI-assisted coding platform Windsurf in a landmark deal estimated at $3 billion, marking its largest acquisition to date. The agreement, which is not yet finalized, would significantly deepen OpenAI’s presence in the rapidly expanding market for AI-powered software development tools.
Windsurf, previously known as Exafunction and later Codeium, builds tools that allow developers to write, debug, and optimize code through natural language. Its offerings are designed to streamline software development using AI, a space seeing soaring demand amid a global push for enhanced coding productivity.
Sources familiar with the matter revealed that Windsurf had been in talks with investors such as General Catalyst and Kleiner Perkins to raise funds at a $3 billion valuation. This matches the value of the reported OpenAI acquisition. Windsurf was previously valued at $1.25 billion in August 2023 after raising $150 million, with investors including Greenoaks also participating.
If the deal goes through, it will not only enhance the coding functionalities within OpenAI’s flagship product, ChatGPT, but also strengthen the company’s position in the competitive generative AI market, where products like GitHub Copilot — also powered by OpenAI , have already gained strong traction.
The move follows OpenAI’s broader strategic expansion beyond text generation. In 2023, the company acquired Rockset, a search and analytics firm, to bolster its enterprise infrastructure. With over 400 million weekly active users as of February, up from 300 million in December, OpenAI is also facing mounting pressure to scale its monetization strategies. Its projected operating costs could reach \$28 billion by 2025, more than double its expected revenue of $12.7 billion.
To support its growing ambitions, OpenAI is reportedly planning to raise up to$40 billion in a new funding round led by SoftBank, potentially bringing its valuation to $300 billion. This reflects strong investor confidence in its expanding portfolio, especially as demand for AI development tools accelerates.
The AI-assisted coding market is expected to triple in size from $4.3 billion in 2023 to $12.6 billion by 2028, driven by a 24% annual growth rate. Tech giants like Microsoft, Amazon, IBM, and Google are actively investing in this space, while startups like Anysphere , maker of Cursor have collectively attracted nearly $1 billion since early 2023.
OpenAI’s bid to acquire Windsurf signals a serious push to stay ahead in this high-growth arena, where AI is redefining how code is written and software is built globally.
