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OpenAI Explores AI Coding Acquisitions Amidst Market Growth
The artificial intelligence sector buzzed with speculation when reports surfaced indicating OpenAI’s interest in acquiring Windsurf, an AI-driven coding firm, for a reported $3 billion. Industry observers immediately questioned why OpenAI would pursue Windsurf instead of Anysphere, the creator of the popular coding assistant Cursor.
Failed Acquisition Talks with Anysphere
Notably, OpenAI Startup Fund has previously invested in Anysphere, the company behind Cursor, participating in its seed funding round in late 2023. According to a CNBC report, OpenAI indeed engaged in acquisition discussions with Anysphere in both 2024 and earlier this year. However, these negotiations were ultimately unsuccessful. Subsequently, Bloomberg reported last month that Anysphere has explored raising capital at a valuation of approximately $10 billion.
Strategic Focus on Code Generation Market
OpenAI’s pursuit of acquisition talks with Windsurf, another developer of coding assistance tools, underscores the increasing importance of capturing a share of the expanding code generation market for the company behind ChatGPT. TechCrunch reported in February that Windsurf generates roughly $40 million in annualized recurring revenue (ARR). In comparison, Cursor from Anysphere reportedly achieves around $200 million in ARR.
Complementary Approaches to Code Assistance
While OpenAI launched its own Codex CLI “agent” on Wednesday, which is capable of writing and modifying code, the company’s interest in acquiring Windsurf suggests a strategic decision to expedite its presence in the code generation market, rather than solely relying on the organic growth of its CLI product.