OpenAI seems to be on the verge of constructing its greatest public acquisition thus far with an settlement reached to purchase Windsurf, the software program developer device powered by massive language fashions (LLMs), to the tune of $3 billion, in accordance with Bloomberg (unpaywalled Yahoo reprint).
Rumors have swirled round such a deal for weeks, however now it seems to be taking place as early as in the present day, Might 6, 2025, with Windsurf CEO and co-founder Varun Mohan posting on X final night time: “Huge announcement tomorrow!”
In accordance with Bloomberg, the deal is supposed to “assist OpenAI tackle rising competitors out there for AI-driven coding assistants — techniques able to duties like writing code primarily based on pure language prompting,” and Windsurf had been in talks with enterprise capital companies to boost one other spherical of personal funding round that $3 billion valuation, up from $1.25 billion final yr.
The startup, previously often called Exafunction and later Codeium, was based in 2021 by MIT graduates Varun Mohan and Douglas Chen, initially as a “security-focused LLM toolkit that gives clever code recommendations within the context of the codebase,” as VentureBeat reported final yr.
Because it gained extra customers, its ambitions grew, culminating within the launch of the Windsurf Built-in Improvement Setting (IDE) in November 2024, a fork of Microsoft’s Visible Studio Code, and the renaming of the corporate after it. Windsurf reportedly now counts greater than 800,000 developer customers and 1,000 enterprises as prospects.
It’s removed from the one sport on the town in relation to LLM-powered IDEs and dev instruments, although: OpenAI was reportedly in talks to purchase one other very related and rival startup, Cursor, and there’s in fact Amazon’s Q Developer and GitHub Copilot as properly. However all are shared of their opinion that LLMs and AI fashions are going to vary software program growth for the foreseeable future, writing code within the blink of an eye fixed that might take human builders minutes, hours, or days to do manually.
What is going to occur to Windsurf’s assist and providing of non-OpenAI LLMs?
For customers, the combination with OpenAI will undoubtedly increase questions.
A part of Windsurf’s attraction is that it’s considerably mannequin agnostic, in that builders who use it will probably select with LLM they need to assist them write code.
Proper now, it gives a number of massive language mannequin choices for its chat interface, together with a customized Windsurf Base Mannequin that’s a fine-tuned variant of Meta’s Llama 3.1 70B, whereas the Premier Mannequin relies on Meta’s bigger Llama 3.1 405B and is built-in with Windsurf’s inside reasoning instruments to assist extra complicated duties, notably in coding.
Subscribers also can entry exterior fashions similar to OpenAI’s GPT-4o and Anthropic’s Claude 3.5 Sonnet, permitting for flexibility in mannequin choice relying on the use case.
Will OpenAI search to take away the choice for customers to pick out exterior LLMs and limit them to OpenAI’s mannequin households similar to GPT-4o, o3, o4, and many others?
We’ll see, however I for one extremely doubt it, given Windsurf’s enterprise has succeeded in some half primarily based on the flexibleness of its device choices. It might additionally doubtless increase complaints of anti-competitive enterprise measures and will even result in some potential lawsuits.
A utilization and information play meant to bolster OpenAI’s fashions towards rivals within the coding area?
As a substitute, I’d think about that OpenAI is wanting on the Windsurf acquisition as a method not solely of buying a preferred developer device that performs properly with its personal fashions, however as a method to collect tons of person and utilization information — and from this, it may see which sorts of builders use rival fashions such because the Meta Llama variants and Anthropic’s Claude, and for what functions, and search to make sure that new variations of OpenAI’s personal LLMs are aggressive on these fronts.
Both method, it’s a “massive freakin deal” — to paraphrase former President Joe Biden — and it’ll undoubtedly have many far-reaching ripple results all through Windsurf’s complete userbase and the broader pool of builders and AI-powered dev instruments.
Already, Windsurf’s Discord server is crammed with posts from customers bracing for the worst — a rise in costs or new entry tiers bundling and limiting its utilization to ChatGPT subscribers or OpenAI API builders.
We’ll be monitoring and reporting what we uncover that’s helpful for technical decision-makers. Keep tuned!
