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OpenAI seems to be on the verge of constructing its greatest public acquisition up to now with an settlement reached to purchase Windsurf, the software program developer instrument powered by massive language fashions (LLMs), to the tune of $3 billion, in line with Bloomberg (unpaywalled Yahoo reprint).
Rumors have swirled round such a deal for weeks, however now it seems to be occurring as early as at present, Could 6, 2025, with Windsurf CEO and co-founder Varun Mohan posting on X final evening: “Massive announcement tomorrow!”
In line with Bloomberg, the deal is supposed to “assist OpenAI tackle rising competitors available in the market for AI-driven coding assistants — programs able to duties like writing code based mostly on pure language prompting,” and Windsurf had been in talks with enterprise capital companies to lift one other spherical of personal funding round that $3 billion valuation, up from $1.25 billion final yr.
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 gives clever code ideas 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 Growth 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 clients.
It’s removed from the one recreation 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 after all Amazon’s Q Developer and GitHub Copilot as nicely. However all are shared of their opinion that LLMs and AI fashions are going to alter software program improvement for the foreseeable future, writing code within the blink of a watch that will 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 mixing 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 presents 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 inner reasoning instruments to assist extra advanced duties, significantly in coding.
Subscribers can even entry exterior fashions akin 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 exterior LLMs and prohibit them to OpenAI’s mannequin households akin 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 based mostly on the pliability of its instrument choices. It will additionally probably 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 in opposition to rivals within the coding house?
As an alternative, I’d think about that OpenAI is wanting on the Windsurf acquisition as a method not solely of buying a well-liked developer instrument that performs nicely with its personal fashions, however as a option to collect tons of consumer and utilization information — and from this, it might see which varieties 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 “large 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 full of 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!
