OpenAI has agreed to buy Windsurf, an artificial intelligence-assisted coding tool formerly known as Codeium, for about US$3-billion, according to people familiar with the matter, marking the ChatGPT maker’s largest acquisition to date.

The deal has not yet closed, said the people, who spoke on condition of anonymity to discuss private matters. OpenAI and Windsurf declined to comment.

The acquisition could help OpenAI take on rising competition in the market for AI-driven coding assistants — systems capable of tasks like writing code based on natural language prompting.

Windsurf, formally called Exafunction, had recently been in talks with investors including Kleiner Perkins and General Catalyst to raise funding at a $3-billion valuation. The company was valued at $1.25-billion in a deal led by General Catalyst last year.

OpenAI rival Anthropic and Microsoft-owned Github both offer AI tools for programmers. Investors have also poured money into a new crop of start-ups offering similar tools, including Anysphere, the start-up behind Cursor.

OpenAI recently finalised a $40-billion financing led by SoftBank Group, which values the company at $300-billion.

For-profit fight

On Monday, OpenAI said it was walking back plans to restructure as a more conventional for-profit business after facing public pushback. The ChatGPT maker said it would move forward with an effort to restructure its for-profit division as a public benefit corporation, but the overall business will instead remain under the control of its nonprofit — a major shift in its plans that will effectively maintain the contours of how OpenAI is currently set up.

The decision to maintain the nonprofit’s control of the company came after OpenAI faced pressure from former employees, academics and rivals, including Elon Musk, who co-founded the start-up a decade earlier before leaving and later launching his own AI company.

Read: OpenAI: We’d buy Chrome if Google was forced to sell

However, Musk’s attorney said OpenAI’s decision to partly walk back its plan to restructure as a for-profit business “changes nothing”, a sign the billionaire may continue with his legal crusade against the start-up.

“OpenAI’s announcement is a transparent dodge that fails to address the core issues: charitable assets have been and still will be transferred for the benefit of private persons, including Altman, his investors and Microsoft,” Marc Toberoff, Musk’s lead counsel in pending litigation against OpenAI, said in a statement late on Monday.

Musk previously asked a judge to block OpenAI from becoming a for-profit business. The judge rejected Musk’s request but has allowed parts of his lawsuit to proceed. Musk also made an unsolicited and unsuccessful $97.4-billion bid to buy the assets of the nonprofit that controls OpenAI. (OpenAI has said Musk is using the legal system to try to slow down a competitor.)

In the statement Monday, Toberoff said the AI start-up’s revised restructuring plan looks to be designed to avoid legal scrutiny but still goes against the founding mission of the company, which was to develop AI for the benefit of all people.

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