OpenAI was recently revealed to be planning to acquire AI programming assistant Windsurf for $3 billion, while Cursor, another high-profile AI programming tool, has just completed a new $900 million financing, valued at $9 billion. This article analyzes the strategic layout and competitive situation of OpenAI and Cursor in the AI programming track, and discusses OpenAI’s strategic intention through the acquisition of Windsurf for your reference.
The hot money in the AI programming track has never been as hot as it is now.
OpenAI was revealed to have spent a sky-high $3 billion to win the AI programming assistant Windsurf, and at the same time, Cursor, which has captured countless developers with “atmosphere coding”, announced a new financing of $900 million, with a valuation of $9 billion.
Under the hustle and bustle, a dark war about the “new entrance” of future developers has already begun. The value balance of AI programming tools is also quietly changing: on the one hand, there are new players represented by Cursor who pursue the ultimate “Vibe” experience; On the other hand, giants like OpenAI are focusing on building new barriers.
01 OpenAI, which is determined to do AI coding
OpenAI’s recent series of actions have indeed made the entire technology circle nervous. Just as it announced a pause in favor of a public interest company (PBC) control model, the AI leader was confirmed to have agreed to spend about $3 billion to smash its largest acquisition budget to date into AI programming aid Windsurf.
Such a blockbuster operation has naturally attracted attention, what is the magic of a Windsurf that does not master the underlying large model itself, which can make OpenAI spend so much money? After all, less than a year ago, Altman publicly declared that OpenAI would “crush” startups developing products in its sphere of influence, and is now willing to offer billions of dollars in takeover offers.
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OpenAI’s move aims directly at the developer community and a strategic new entrance that cannot be missed.
First of all, the strategic card slot developer entrance is OpenAI’s intention. Software development is undoubtedly one of the application scenarios with the most commercial potential for AI, and it has long been the focus of competition among all parties.
In the past, OpenAI exported capabilities to developers more in the form of APIs, but now, it clearly wants to participate more directly at the application level.
Through Windsurf, OpenAI can quickly establish a bridgehead in the field of AI programming, even if it means entering a market with many players (including Cursor, Bolt, Replit, Vercel, and giants such as Microsoft, Amazon, Google, etc.), and taking the initiative from model to application end-to-end. This is also interpreted by the outside world as a signal that OpenAI intends to build a demonstration product on the software development agent.
Behind this deal, it may stem from OpenAI’s considerations of data, ecology and opportunity costs.
The acquisition of Windsurf will undoubtedly give OpenAI access to massive, real developer interaction data, which is valuable for training and iterating on its future programming models and improving code understanding and generation capabilities.
At the same time, the mature user base, brand recognition, experienced engineering team, and important market trial and error experience brought by Windsurf, such as which features are popular and which are minefields, are all assets of OpenAI. This is far more efficient than cultivating a product from scratch and accumulating users, which can be said to be a waste of money and time.
Considering the high operating costs OpenAI itself faces (reports say its 2025 revenue target is $12.7 billion). However, operating costs may be as high as $28 billion) and the huge pressure to maintain industry leadership, this “space for time” strategy also reflects its urgency to accelerate commercialization at the application layer and alleviate growth anxiety. The previous acquisition of remote collaboration tool Multi and real-time analysis database Rockset is also a similar layout idea to build a more complete technology stack and application scenarios.
Of course, this vertical integration strategy of “buy, buy, buy” is not all risk-free. Will it create a better closed-loop experience through the integration of software and hardware like Apple, or will it trap itself in delicate competition with important business partners, or even fall into the mistakes of the blind expansion of some giants because the front line is too long? From a broader perspective, when leading players quickly integrate market resources through acquisitions, will it invisibly squeeze the living space of independent innovators and make the entire industry lose some possibilities?
It is worth noting that OpenAI invested $8 million in a seed round of financing for Anysphere (Cursor’s parent company) in 2023, and it is reported that OpenAI’s initial acquisition target was actually Cursor, but after failing to do so, it turned its attention to Windsurf, which shows OpenAI’s dedication to AI programming. However, what impact this will have on the innovation vitality of the entire ecosystem is far from as simple as the acquisition itself.
02 AI programming upstart Cursor, relying on “atmosphere” is worth $9 billion?
If OpenAI’s acquisition is the layout of major manufacturers in AI programming, then Cursor is another whirlwind on the track. The company, founded in 2022 by several MIT graduates in their twenties, has seen its annual recurring revenue (ARR) grow rapidly to $200 million thanks to its AI programming tool, Cursor. The latest round of financing is as high as $900 million, with a valuation of $9 billion.
What does Cursor rely on with such a growth rate and valuation level? Perhaps the answer lies in Cursor’s ability to capture and create a new programming experience that Andrej Karpathy calls “Vibe Coding.” In simple terms, it is a way for developers to collaborate with AI more naturally and fluently, generating and modifying code through dialogue and describing requirements, rather than completely manually typing.
Cursor seems to have taken this “feel” of human-machine collaboration to a new level, quickly winning the favor of a large number of developers, not only with millions of daily active users, but also with an impressive customer list, including Stripe, Spotify, and even OpenAI itself.
Impressive financial data is another factor supporting its high valuation. Achieving $200 million in ARR in a short period of time is a remarkable achievement in the software industry itself. In the context that the valuation of basic large model companies such as OpenAI and Anthropic has left most capital in the dust, AI application layer companies such as Cursor, which have shown strong growth momentum, have naturally become the target of chasing.
However, Cursor also faces real torture and potential risks. Even with an ARR of $200 million, the price-to-sales ratio (P/S ratio) corresponding to a $9 billion valuation is more than 40 times, which is quite aggressive by universal SaaS standards.
Cursor’s dependence on third-party large models in core technology is also a potential hidden danger. Currently, Cursor’s programming assistance capabilities rely heavily on external models such as Anthropic’s Claude Sonnet. This dependency means that once the model provider adjusts the terms of cooperation, raises prices significantly, or simply launches its own more functional integration tools, Cursor may face the dilemma of supply chain “bottleneck”, and its product competitiveness and profit margins will be directly impacted.
The deeper torture is the true depth and durability of the commercial moat. Many analysts pointed out that the underlying architecture of many AI IDE tools similar to Cursor may be based on Microsoft’s VS Code open source project for branching, and the core innovation is more reflected in user interaction and experience optimization rather than the underlying technology breakthrough that is difficult to replicate.
The biggest potential threat to Cursor has always come from tech giants with operating systems, cloud platforms, and mainstream development tools. If companies such as Microsoft (which already owns GitHub Copilot) and Google decide to deeply integrate AI programming tools within their huge ecosystem that are powerful enough, smooth enough, and even adopt a free or extremely low-price strategy, then independent startups like Cursor are likely to quickly dim in the face of the giant’s dimensionality reduction blow.
Cursors are on the cusp of “atmosphere programming”, but to have the last laugh in this giant-surrounded card game, it is obvious that more hard power and a business model that can stand the test of time is needed.
03 AI programming: “Siege” has been established, and “value” needs to be tested
Cursor’s strategic merger with OpenAI marks that the field of AI programming has entered a more complex stage of business competition from a technological experiment. And large model companies are no longer satisfied with just providing “fuel” and have begun to build a complete value chain from model to application in person. The core of the competition is no longer just about improving code efficiency, but about competing for the entrance to the “developers” group.
Whether it’s OpenAI building a closed loop from model to infrastructure through a series of acquisitions, Apple teaming up with Anthropic to optimize AI coding capabilities in its Xcode ecosystem, or Microsoft’s continued investment in GitHub Copilot, the intention of these leading technology companies is very clear: to retain developers.
This means that developers may have to choose between several major “sieges” in the future, and their workflows may also be more deeply tied to specific platforms. This centralization of the “entrance” may bring a more integrated and powerful functional experience in the short term, but in the long run, it is still unknown whether VS Code’s success with its openness and scalability can be replaced by a new “entrance” form under the AI wave.
On the other hand, when AI code generation capabilities themselves gradually become popular and may even be integrated into various platforms at very low cost or free of charge by basic large model providers, independent AI programming tools (such as Cursor) must provide more core value beyond code generation to retain users. Will it evolve into an “agent” that can collaborate deeply with developers, provide more extreme solutions in specific verticals, or make the “atmosphere” experience itself an irreplaceable brand feature? Whether independent AI programming tools can successfully break through this test is still inconclusive. But what is certain is that this battle around the “entrance” of developers has just begun.
