OpenAI is reportedly in discussions to acquire Codeium, the company behind the AI coding assistant tool Windsurf, for approximately $3 billion. Codeium is in the process of raising new funding. They’re going for a gargantuan $2.85 billion valuation and have a board that includes this country’s most famous venture capital firm Kleiner Perkins. We expect an official announcement about the deal later this week.
MIT graduates Varun Mohan and Douglas Chen started Codeium in 2021. The company has quickly soared to become a key player in the broader tech industry. The company’s flagship product, Windsurf, has recently received accolades for its power in helping developers write code faster and more efficiently. OpenAI’s Chief Product Officer, Kevin Weil, has praised Windsurf’s performance in a recent promotional video, further highlighting the tool’s potential impact on the coding landscape.
In addition to its core product, Codeium has successfully raised $243 million from various investors, including Greenoaks Capital and General Catalyst. Codeium’s growth has been nothing short of spectacular, but it’s still on a run rate of ARR $40 million. Its competitor Cursor has been flying high with an ARR of $200 million. This difference calls into question how long the disparity is sustainable for Codeium’s growth trajectory.
Codeium just announced to their userbase on email that they now have an opt-out available. With a subscription of just $10 per month, they can get exclusive access to its advanced coding editor. The email teased a major announcement coming soon, seemingly connected to the rumored acquisition talks between them and OpenAI.
The news of OpenAI’s potential acquisition would also be significant for the OpenAI Startup Fund, which has apparently made one of its most notable investments in Codeium. RELATED GO TO THE TOXICS RELEASE INVENTORY Critics say buying the company would hurt the fund’s reputation. They have no shortage of competition—check out the landscape of AI-powered coding assistants including Anysphere, Cursor.
Their continuing negotiations and upcoming acquisition coincide with a booming demand for AI-fueled coding solutions. As a result, developers are already turning to these tools to increase their efficiency. This agreement has the potential to greatly impact the competitive environment between industry members.
