Windsurf vs Cursor: Inside OpenAI's quest for an AI coding startup
Last year, Cursor's desktop application had gained significant popularity, particularly for its ability to assist with coding using Anthropic's Claude 3.5 Sonnet model, which was later enhanced by Microsoft's integration of the model into its GitHub Copilot assistant.
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Prior to OpenAI entering discussions to acquire AI-assisted coding startup Windsurf , it explored acquiring Cursor , a similar tool developed by Anysphere.However, despite multiple attempts, the talks failed to reach fruition. According to TechCrunch, Anysphere is growing rapidly and has no intention of selling.Anysphere has received other acquisition offers but has consistently rejected these proposals, with the company preferring to maintain its independence.OpenAI's search for a potential AI coding tool led to discussions with over 20 startups, eventually culminating in serious talks about acquiring Windsurf for approximately $3 billion, according to Bloomberg.Last year, Cursor's desktop application had gained significant popularity, particularly for its ability to assist with coding using Anthropic's Claude 3.5 Sonnet model, which was later enhanced by Microsoft's integration of the model into its GitHub Copilot assistant.The platform's popularity surged further after Andrej Karpathy popularised ' vibe coding ', where AI is directed to write code. As of March, Cursor had over one million daily users, highlighting its rapid growth and appeal.In contrast, Windsurf is a smaller company but has been gaining traction within the developer community as well. Its coding product is particularly noted for its ability to integrate with legacy enterprise systems.All this is to say that while OpenAI could have built its own AI coding assistant, acquiring an established product such as Windsurf would allow it to bypass the challenges of building a business from scratch, and provide instant access to a loyal developer base.Windsurf has raised significant funding, including a $150 million round led by General Catalyst last year, which valued the company at $1.25 billion.Despite this smaller valuation, Windsurf was in discussions with investors such as Kleiner Perkins and General Catalyst to raise additional funds, with a potential valuation of $3 billion.
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