The recent news of OpenAI’s potential acquisition of AI coding company Windsurf for $3 billion raised questions among industry observers, with many wondering why the company didn’t consider acquiring Anysphere, the creator of Cursor, instead.

As it happens, OpenAI has been an investor in Anysphere since the latter’s seed round in late 2023, and had actually approached the company about a potential acquisition in 2024 and again earlier this year, according to a report by CNBC. However, the talks ultimately fell through. Meanwhile, Anysphere is reportedly in discussions to raise capital at a valuation of around $10 billion, as reported by Bloomberg last month.

OpenAI’s decision to pursue acquisition talks with Windsurf instead highlights the growing importance of capturing a share of the code generation market for the company behind ChatGPT. With Windsurf generating around $40 million in annualized recurring revenue (ARR), and Anysphere’s Cursor reportedly generating $200 million on an ARR basis, it’s clear that OpenAI is eager to establish a strong presence in this space. OpenAI’s own Codex CLI “agent”, which was released on Wednesday, also has the capability to write and edit code, but the company’s attempt to acquire Windsurf suggests that it doesn’t want to wait for this product to gain traction with customers.

The fact that OpenAI is willing to spend $3 billion on an acquisition suggests that the company is serious about becoming a major player in the code generation market. With Anysphere’s Cursor already generating significant revenue, it will be interesting to see how the company’s decision to raise capital at a $10 billion valuation will impact the market, and whether OpenAI’s acquisition of Windsurf will ultimately pay off.