In a major move that’s likely to shake up the AI development tools space, Bloomberg has reported that OpenAI is set to acquire Windsurf, an AI coding assistant formerly known as Kodium, for a staggering $3 billion. If finalized, this will mark OpenAI’s largest acquisition to date.
What We Know So Far
According to sources familiar with the matter (who remained anonymous due to the private nature of the deal), the acquisition hasn’t officially closed yet. Still, the signs are strong. OpenAI and Windsurf have declined to comment publicly, but the writing has been on the wall for some time:
- Windsurf team members have been appearing in OpenAI’s livestreams.
- Sam Altman has been actively retweeting Windsurf’s CEO.
- Windsurf’s CEO recently teased a “big announcement”—likely the official reveal of this deal.
Interestingly, OpenAI reportedly first attempted to acquire Cursor, another AI-powered code editor. However, that deal didn’t materialize. Cursor has since raised a round of funding at a massive $9 billion valuation, showing how hot this space has become.
Windsurf: A Unique Code Editor
Windsurf has stood out in the crowded field of AI coding tools. Many users—including myself—preferred it over competitors like Cursor due to its elegant execution of core principles and innovative features.
They also hinted at a deepening relationship with OpenAI earlier when they made GPT-4 and GPT-4.1 free on their platform, suggesting tighter integration or favorable access to OpenAI’s models.
But now, with Windsurf becoming part of OpenAI, the future feels uncertain. Will they:
- Retain their current feature set?
- Start offering exclusive access to OpenAI models?
- Drop support for third-party models?
These are real questions users will have in the coming weeks.
Internal Conflicts? Windsurf vs. Copilot
Here’s where things get interesting: Windsurf is a direct competitor to GitHub Copilot, which is owned by Microsoft. And Microsoft is also OpenAI’s biggest investor. That means Windsurf and Copilot are now sibling products under the same corporate umbrella—which is both strange and strategic.
It’s reminiscent of the smartphone market, where companies like BBK Electronics own competing brands like OnePlus, Vivo, and Oppo. It’s smarter to compete with yourself than lose ground to a third party.
Still, GitHub may no longer receive exclusive treatment from OpenAI, which could level the playing field or even tilt it toward Windsurf.
Why Didn’t OpenAI Just Build One?
That’s a valid concern. With OpenAI’s valuation around $300 billion, you’d expect them to easily build a state-of-the-art AI code editor from scratch. Instead, they opted for acquisition, buying a ready-made tool with an existing user base.
It’s a practical move—but a little disappointing. The fear is that Windsurf might become bloated or lose its unique edge once absorbed into OpenAI’s ecosystem.
Monetization and Profitability
Let’s not forget: tools like Cursor, Windsurf, and even OpenAI itself are not profitable, despite high revenue. These companies operate in a capital-heavy cycle, needing to raise funds frequently to stay afloat. Windsurf’s recent pricing changes and model support restructuring suggest they were optimizing for growth—and possibly acquisition.
The Bigger Picture: AI Editor Wars
- OpenAI now owns Windsurf.
- Microsoft has Copilot.
- Anthropic is working with Zed.
- Google has Firebase Studio (formerly Project IDX).
It’s clear we’re entering a new phase of AI development environment wars, and it’s not just about models—it’s about owning the whole user workflow.
OpenAI investing in Cursor while acquiring Windsurf raises questions about conflict of interest. It feels like OpenAI is quietly controlling both players, which is troubling for diversity in the space.
That’s why open-source options like Zed are becoming even more valuable. Anthropic’s partnership with Zed makes it an intriguing alternative.
What’s Next?
If OpenAI wants to maximize this acquisition, they should consider:
- Bundling Windsurf with ChatGPT Plus or Team/Enterprise plans.
- Offering exclusive access to custom coding models.
- Keeping the editor lightweight and efficient, unlike traditional IDEs.
The coding assistant space is heating up. If OpenAI truly wants to rival tools like Gemini 2.5 Pro and make a dent in agentic coding, they need models that are not just smart, but fast, cheap, and deeply integrated with developer workflows.