OpenAI to acquire Windsurf for $3B, Cursor raises $900M amid AI coding boom

OpenAI has agreed to acquire Windsurf, an AI-assisted integrated development environment (IDE) with agentic capabilities, for approximately $3 billion. This would mark its largest acquisition to date, according to Bloomberg News. Windsurf specializes in converting natural language prompts into executable code, aiming to boost developer productivity. It supports multiple leading AI models, including Gemini 2.5 Pro, GPT-4o, DeepSeek V3, and Claude Sonnet 3.7, among others.

Previously in late April, Windsurf had reduced the price of its Pro plan from $20 to $15 per month, and its Teams plan from $35 to $30 per month, while continuing to offer a free version.

Meanwhile, in a significant development in the AI coding space, Anysphere, the company behind Cursor, an AI-powered code editor, has raised $900 million in funding, pushing its valuation to $9 billion. Cursor acts as a pair programmer, allowing users to generate and refine code using natural language prompts. It also provides access to top AI models, predicts the next lines of code, and can interpret a user’s codebase to answer related questions. Cursor offers a free plan, a Pro plan at $20 per month, and a Business plan at $40 per month.

The Windsurf acquisition and Cursor's funding round underscore the intensifying competition in the AI coding tools market. OpenAI's move strengthens its position against rivals like Anysphere and Microsoft-owned GitHub Copilot, while Cursor's funding reflects the surging investor interest in this space.

These developments signal a major shift in software development. AI is rapidly evolving from a support tool to a core component of coding workflows, automating complex tasks, accelerating development cycles, and lowering barriers to entry for new programmers. The rise of AI-powered IDEs suggests that this technology will play a central role in how software is created in the near future.