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 giant 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 at the moment, Could 6, 2025, with Windsurf CEO and co-founder Varun Mohan posting on X final evening: “Big announcement tomorrow!”
In line with Bloomberg, the deal is supposed to “help OpenAI take on rising competition in the market for AI-driven coding assistants — systems capable of tasks like writing code based on natural language prompting,” and Windsurf had been in talks with enterprise capital corporations to lift one other spherical of personal funding round that $3 billion valuation, up from $1.25 billion final 12 months.
The startup, previously generally known as Exafunction and later Codeium, was based in 2021 by MIT graduates Varun Mohan and Douglas Chen, initially as a “security-focused LLM toolkit that provides intelligent code suggestions in the context of the codebase,” as VentureBeat reported final 12 months.
Because it gained extra customers, its ambitions grew, culminating within the launch of the Windsurf Built-in Growth Surroundings (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 comparable and rival startup, Cursor, and there’s in fact Amazon’s Q Developer and GitHub Copilot as effectively. However all are shared of their opinion that LLMs and AI fashions are going to alter software program growth for the foreseeable future, writing code within the blink of a watch that might take human builders minutes, hours, or days to do manually.
What’s going to occur to Windsurf’s help and providing of non-OpenAI LLMs?
For customers, the combination with OpenAI will undoubtedly elevate 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 affords a number of giant 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 is predicated on Meta’s bigger Llama 3.1 405B and is built-in with Windsurf’s inside reasoning instruments to help extra complicated duties, significantly in coding.
Subscribers also can entry exterior fashions corresponding 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 corresponding to GPT-4o, o3, o4, and so on?
We’ll see, however I for one extremely doubt it, given Windsurf’s enterprise has succeeded in some half primarily based on the pliability of its device choices. It will additionally possible elevate 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 opponents within the coding house?
As a substitute, I’d think about that OpenAI is trying on the Windsurf acquisition as a way not solely of buying a preferred developer device that performs effectively with its personal fashions, however as a approach to collect tons of consumer and utilization information — and from this, it might see which kinds 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 manner, it’s a “big freakin deal” — to paraphrase former President Joe Biden — and it’ll undoubtedly have many far-reaching ripple results all through Windsurf’s whole userbase and the broader pool of builders and AI-powered dev instruments.
Already, Windsurf’s Discord server is stuffed 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!
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