OpenAI is reportedly negotiating a potential $3 billion acquisition of Codeium, the startup behind the popular AI-powered coding assistant known as Windsurf, according to Bloomberg. News about the acquisition is expected later this week.
If finalized, this deal would significantly enhance OpenAI’s position in the competitive field of AI-powered coding tools. It would also place OpenAI directly against other prominent coding assistant providers, notably Anysphere, creator of Cursor, a company that received significant backing from OpenAI’s own investment vehicle, the OpenAI Startup Fund. A source familiar with Cursor’s investor structure expressed concerns that acquiring Codeium might affect the credibility of OpenAI’s funding commitments through this startup fund, although it’s not clear whether Cursor had also been considered as an acquisition target.
Hints pointing to the impending deal emerged recently when Windsurf users received an email notifying them of an upcoming announcement and offering customers the chance to lock in their access at a monthly subscription fee of $10. Further fueling speculation, Kevin Weil, Chief Product Officer at OpenAI, highlighted Windsurf’s capabilities in a promotional video posted yesterday.
Earlier reports indicated that Codeium was in the process of raising funds at a valuation of around $2.85 billion, led by venture capital firm Kleiner Perkins. The company has reportedly reached approximately $40 million in annualized recurring revenue. Although Codeium’s revenue remains significantly below Cursor’s reported annual recurring revenue of about $200 million, Cursor was recently in talks to raise new capital at a valuation in the neighborhood of $10 billion.
Codeium was co-founded in 2021 by Varun Mohan and Douglas Chen, childhood friends and former classmates at MIT. Over the past several years, the startup raised a combined total of $243 million from leading investment firms, including Greenoaks Capital and General Catalyst.
