Wednesday, May 14

OpenAI is in talks to acquire Windsurf, an A.I.-powered computer programming tool, for around $3 billion, according to two people familiar with the discussions.

The acquisition could gain OpenAI thousands of new customers in the tech industry, which is rapidly embracing tools, like Windsurf, that can instantly generate computer code.

The potential deal, which would be OpenAI’s largest acquisition, is part of the company’s effort to expand what it can offer beyond its popular chatbot, ChatGPT. Last year, OpenAI acquired Rockset, a start-up that helped companies build the nuts and bolts of big computer networks.

Windsurf, formerly known as Codeium, was valued at $1.25 billion last year, after a $150 million funding round led by the venture capital firm General Catalyst.

The deal is not yet final, said the two people, who spoke on the condition of anonymity. The talks were reported earlier by Bloomberg.

OpenAI already offers technology that can generate its own code. In fact, Windsurf relies on OpenAI technology — or similar systems from companies like Google or Anthropic — to generate code.

About four years ago, researchers at companies like OpenAI and Google started designing systems that analyzed enormous amounts of text culled from the internet, including digital books, Wikipedia articles and chat logs. By pinpointing patterns in all that text, these systems could generate text on their own, including poetry and news articles.

Much to the surprise of the researchers who built these systems, they could even write their own computer code. Now, programmers are using these systems to generate code and fold it into larger software development projects through a variety of products, including Windsurf and Microsoft’s Copilot.

(The Times has sued OpenAI and its partner, Microsoft, accusing them of copyright infringement regarding news content related to A.I. systems. OpenAI and Microsoft have denied those claims.)

Building the technology that power these coding tools is enormously expensive for companies like OpenAI, and the start-up is under pressure to raise revenues.

OpenAI expects about $3.7 billion in sales this year, according to financial documents reviewed by The New York Times. OpenAI estimated that its revenue would reach $11.6 billion next year.

In March, OpenAI completed a $40 billion fund-raising deal that valued the company at $300 billion, making it one of the most valuable private companies in the world, along with the rocket company SpaceX and ByteDance, the maker of TikTok. The round was led by the Japanese conglomerate SoftBank.

But the deal has a caveat: OpenAI is trying to change its complicated corporate structure, and if it does not do it by the end of the year, SoftBank will have the option to reduce its total contribution to $20 billion, a person familiar with the deal said.

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