OpenAI Reaches Agreement To Buy Startup Windsurf For $3 Billion

An anonymous reader quotes a report from Reuters: OpenAI has agreed to buy artificial intelligence-assisted coding tool Windsurf for about $3 billion, Bloomberg News reported on Monday, citing people familiar with the matter. The deal has not yet closed, the report added. Windsurf, formerly known as Codeium, had recently been in talks with investors including General Catalyst and Kleiner Perkins to raise funding at a $3 billion valuation, according to Bloomberg News. The report notes that the deal "would be OpenAI's largest acquisition to date," further complementing ChatGPT's coding capabilities.

Why did they think it's worth it?

[elucido]

One of the dumbest deals I've ever seen. You could pay me to build something like Windsurf, or many of us could, for less than what they paid.

Re:

[DarkOx]

That is the case with a lot of unicorn/startup type stuff

The relevant questions are:

Do they have patents?
Are those patents realistically enforceable?

Do they already have so much name recognition and mind share entering the market will be hard?

I could not have told you who Windsurf was, so the company name itself is probably of little value. Codeium I am have least heard of but I don't know much about it until I looked it up again just now.

I am inclined to agree with you here, unless they have some iron cla

Re:

[Jean-Clod]

Cisco used to do a ton of acquisitions like this, ones that look pointless, but serve some function. And the function is to get pre-screened engineers, as well as stymie a potential competitor in a field that they might want to enter in the future. Of course, Altman being Altman, they massively overpaid for this one. Effectively they are paying $3B to acquire 191 employees, not all of which will be kept. That works out to around $15.7M per employee before layoffs. By contrast, Cisco used to pay around $100

Re:

[pulu]

Cisco used to do a ton of acquisitions like this, ones that look pointless, but serve some function. And the function is to get pre-screened engineers,

That's what I was thinking too. When the money gets crazy it's not just getting a couple of rock stars, if you get a couple of rock star teams that are already running well together and can infuse a bunch of culture into the bigger org, it can make a huge difference to a company... but why can't their robots do it, lol

Re:

[ZipNada]

It is a little puzzling. Windsurf is not much more than a fancy VS Code extension, the heavy lifting is done by the backend AI. Originally it was just a code-completion utility but a few months back they started shipping their own custom version of VS Code with the extension embedded. It does work well, they did a good job on it.

With a subscription price of only $15/month I suspect it has been a money-losing operation. Probably they have been subsidized by their AI partners with cheap wholesale tokens. My g

Re:

[Jean-Clod]

More likely it's the engineers that they wanted, and grossly overpaid for them. Most likely the back-end was OpenAI anyway.

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[ZipNada]

Actually the back end of Windsurf is easily selectable, which makes it one of the most useful of all the coding utilities. There currently are 16 different AI options to choose from including Deepseek, Gemini, x-AI Grok, and Anthropic. It remains to be seen whether all those options will be available after OpenAI acquires Windsurf.

3 F... Billions Dolars?

[hviniciusg]

Why in the hell is a VScode slaped addon worth so much?

So, is it a profit or non-profit motivated move?

[Fly Swatter]

Inquiring minds are sitting here eating popcorn.