OpenAI Explored Acquisition of Cursor Creator Prior to $3 Billion Negotiations for Windsurf
OpenAI’s Acquisition Strategy: Why Windsurf and Not Cursor?
When it was announced that OpenAI was in negotiations to acquire the AI coding company Windsurf for a whopping $3 billion, many observers couldn’t help but wonder why OpenAI didn’t opt for acquiring Anysphere, the creator of the popular coding assistant, Cursor. OpenAI is known for its commitment to advancing artificial intelligence, and this decision raises some intriguing questions about their strategy in the coding assistant landscape.
The Anysphere Connection
OpenAI has been an investor in Anysphere, the company behind Cursor, since the early funding stages in late 2023. As the coding assistant quickly gained popularity, it seemed like a logical choice for OpenAI to consider acquiring Anysphere. Reports indicate that OpenAI approached Anysphere for acquisition discussions in 2024 and again in early 2025. However, those negotiations did not come to fruition. Instead, Anysphere has been exploring options to raise additional capital, with a valuation reportedly reaching around $10 billion, as reported by Bloomberg last month.
The Importance of the Coding Market
OpenAI’s shift towards acquiring Windsurf highlights how crucial it is for them to have a significant foothold in the rapidly growing code generation market. Windsurf, despite being a competitor, boasts an annual recurring revenue (ARR) of approximately $40 million, according to TechCrunch. In contrast, Anysphere’s Cursor generates an impressive $200 million in ARR. This stark difference suggests that while both companies are in the same niche, the performance metrics of Cursor may have played a role in OpenAI’s strategic choice.
Understanding OpenAI’s Offerings
OpenAI has developed its own coding capabilities, notably through the Codex CLI “agent.” This tool enables users to write and edit code, reflecting OpenAI’s effort to enhance its offerings in the coding assistant domain. However, the decision to pursue Windsurf suggests that OpenAI is eager to expedite its growth in this sector rather than relying solely on its CLI’s future acceptance by users.
Insights into the AI Coding Assistant Market
The AI coding assistant market is becoming increasingly competitive, with numerous players vying for market share. Here are some insights into what makes this market significant:
High Growth Potential: The demand for AI-driven coding solutions has surged, prompting rapid innovation and investment.
Diverse Offerings: Companies like Windsurf and Cursor provide various features, improving programmer efficiency and collaboration.
Revenue Generation: The significant ARR metrics showcase the potential for profitability within this niche.
- Strategic Partnerships: Companies are forming partnerships and acquiring others to consolidate their positions in a growing market.
OpenAI’s decision to target Windsurf rather than pursuing a deal with Anysphere reflects a strategic approach to capture a larger slice of the coding assistant market. This represents an important step in their ongoing mission to enhance AI capabilities and improve coding efficiency for developers around the world. As the situation evolves, industry observers will be keen to see how these strategies unfold and the impact they will have on the broader artificial intelligence landscape.
