^{Sam Altman, co-founder and CEO of OpenAI, at the DealBook summit on Dec. 4. |Michael M. Santiago—Getty Images}

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OpenAI, the creator of ChatGPT, initially considered acquiring Anysphere—the startup behind the AI-powered code editor Cursor—before entering advanced negotiations to purchase Windsurf (formerly Codeium) for over $3 billion. ​

Cursor: A Rising Star in AI-Powered Coding

Founded in 2022 by MIT alumni, Anysphere's Cursor has rapidly gained traction among developers. The tool integrates seamlessly with workflows, offering features like code rewriting, debugging, and intelligent suggestions. By March 2025, Cursor boasted over one million daily users and had surpassed $100 million in annual recurring revenue (ARR). ​

Anysphere's rapid growth attracted significant investor interest. In March 2025, the company was in talks to raise funding at a valuation nearing $10 billion, a substantial leap from its previous $2.5 billion valuation just months prior.

OpenAI's Strategic Shift to Windsurf

After initial discussions with Anysphere did not materialize into a deal, OpenAI turned its attention to Windsurf. The company is now in advanced talks to acquire Windsurf for approximately $3 billion, marking what would be its largest acquisition to date. ​

Windsurf, known for its AI-driven coding assistance, has also seen rapid growth. The startup previously raised $150 million in funding, achieving a valuation of $1.25 billion. ​

The Competitive Landscape of AI Coding Tools

The AI coding assistant market is experiencing a boom, with several startups achieving high valuations:​

• Anysphere (Cursor): In talks for a $10 billion valuation with over $100 million ARR. ​
• Windsurf (Codeium): Raising funds at a near $3 billion valuation with approximately $40 million ARR. ​
• Poolside: Another AI-powered coding company developing its own large language model, attracting investor interest. ​

These developments highlight the intense competition and investor enthusiasm in the AI coding sector.​

OpenAI's Advancements in AI Models

In April 2025, OpenAI released two new AI models, o3 and o4-mini, enhancing capabilities in coding, mathematics, and visual analysis. The o3 model, in particular, is noted for its advanced reasoning abilities and integration of visual inputs. ​‍

These models are part of OpenAI's broader strategy to enhance its AI offerings and maintain a competitive edge in the rapidly evolving AI landscape.​

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OpenAI's exploration of acquiring Cursor before shifting focus to Windsurf underscores the company's commitment to strengthening its position in the AI-powered coding assistant market. As the demand for intelligent developer tools grows, strategic acquisitions and advancements in AI models will play a crucial role in shaping the future of software development.​

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