OpenAI in talks to acquire Windsurf for ~$3B in its largest-ever acquisition
Apr 16, 2025
Key Points
- OpenAI is in advanced talks to acquire Windsurf, an AI coding tool, for approximately $3 billion, marking its largest acquisition and capping a four-year path from seed to nine-figure exit.
- Early backers Green Oaks and subsequent investors Kleiner Perkins and General Catalyst stand to see massive returns, with Green Oaks alone realizing roughly $750 million on a $28 million invested stake.
- The deal signals OpenAI's shift toward vertical integration in developer tools, aiming to control the end-user experience against Cursor's momentum rather than relying on licensing its models to third-party builders.
Summary
OpenAI is in advanced talks to acquire Windsurf, an AI coding tool formerly known as Kodium, for approximately $3 billion. This is OpenAI's largest acquisition to date.
Windsurf raised $3 million at a $26 million post-money valuation in its seed round, led by Green Oaks. The company closed a Series A of $25 million at a $215 million post, with Green Oaks investing again. Kleiner Perkins led the Series B at $65 million on a $510 million post, followed by General Catalyst in a $150 million Series C at a $1.25 billion valuation.
At the $3 billion acquisition price, founders and the team, estimated to own roughly 55% of the company after dilution, stand to receive over $1 billion in liquidity. Green Oaks invested $28 million across seed and Series A and will see a return of approximately $750 million on that stake, a roughly 27x multiple.
OpenAI faces mounting competition from Cursor, which has become the default coding agent for many developers. By acquiring Windsurf and its user base, OpenAI gains not just a popular wrapper around its models but also the integrations and product polish that have made Cursor sticky. The deal signals that OpenAI sees value in owning distribution for coding, a category where the best model alone does not guarantee market leadership.
The timing reflects a shift in how foundation model companies compete. Rather than licensing models to third-party tool builders, OpenAI is investing in vertical integration to control the end-user experience. A code-first foundation model trained specifically for programming, bundled with Windsurf's interface and tooling, would give OpenAI a more defensible position against Cursor's momentum in the developer segment.