Eye On AI: OpenAI’s Potential Windsurf Deal Could Be The Start Of A New M&A Trend
This column is a look back at the week that was in AI. Read the previous one here.
Last year saw big names including Mastercard, Nvidia and AMD dive into the M&A pond and buy venture-backed AI-related startups.
This year, a new, younger set of buyers could emerge — considering their sizable war chests.
Last week, it was reported OpenAI is in talks to acquire artificial intelligence-assisted coding tool Windsurf — previously called Codeium — for a cool $3 billion. The deal would not be the generative AI giant’s first purchase — it has made a trio of acquisitions, per Crunchbase — but it would be by far its biggest.
It’s also not that shocking, considering the massive $40 billion investment OpenAI received from the likes of SoftBank in late March.
Apparently, OpenAI even tried to buy code-writing startup Anysphere — which sells the popular Cursor application — per a report before turning its attention to Windsurf.
That buy seems like it would have been even more costly, as Bloomberg reported Anysphere was in talks to raise funding at a valuation of close to $10 billion.
But hey, OpenAI has the money, even if it does burn a lot of cash for its modeling and compute needs, as do its competitors.
More deals
In fact, OpenAI was not the only generative AI giant to open up the checkbook last week. Anthropic took part in Goodfire’s $50 million Series A led by Menlo Ventures. San Francisco-based Goodfire helps enterprises understand and design AI models.
That investment was the first one Anthropic has made into a startup — aside from participating in Menlo’s Anthology Fund. However, it wouldn’t shock anyone if it was not the last deal — investment or even an outright acquisition — considering it has raised $4.5 billion already this calendar year.
And lest we forget, it was just late March when Elon Musk’s artificial intelligence startup, xAI, bought X, the social media platform he also owns, for $33 billion in an all-stock transaction. That was xAI’s second acquisition, per Crunchbase.
xAI is now reportedly in talks to raise $20 billion after raising $12 billion in 2024 alone. It would only make sense it will become more acquisitive — especially as its biggest rival, OpenAI, has become more opportunistic.
Of course, none of this is to say massive public companies are going to pull back on acquiring AI startups. The big news early this week was $120 billion market cap cyber giant Palo Alto Networks announcing its intent to buy Protect AI, which specializes in securing AI applications, for an undisclosed sum. The company was valued at about $400 million last summer.
Those deals will undoubtedly still occur, but do expect some privately owned AI titans to also participate in the buying fun.
Related Crunchbase Pro list:
Related reading:
- Global M&A Startup Dealmaking Sees Year-To-Year Boost In Q1
- Moveworks Delivers Big Exit For Early VCs
- AI’s Big Day — Startup Safe Superintelligence Raises $1B At Reported $5B Valuation
- Musk Merges xAI And X
Illustration: Dom Guzman
Read More
Sequoia Was Busiest Startup Investor In June, While Meta Spent The Most
California Share Of Startup Funding Is Still On The Rise
Eye On AI: OpenAI’s Potential Windsurf Deal Could Be The Start Of A New M&A Trend
This column is a look back at the week that was in AI. Read the previous one here.
Last year saw big names including Mastercard, Nvidia and AMD dive into the M&A pond and buy venture-backed AI-related startups.
This year, a new, younger set of buyers could emerge — considering their sizable war chests.
Last week, it was reported OpenAI is in talks to acquire artificial intelligence-assisted coding tool Windsurf — previously called Codeium — for a cool $3 billion. The deal would not be the generative AI giant’s first purchase — it has made a trio of acquisitions, per Crunchbase — but it would be by far its biggest.
It’s also not that shocking, considering the massive $40 billion investment OpenAI received from the likes of SoftBank in late March.
Apparently, OpenAI even tried to buy code-writing startup Anysphere — which sells the popular Cursor application — per a report before turning its attention to Windsurf.
That buy seems like it would have been even more costly, as Bloomberg reported Anysphere was in talks to raise funding at a valuation of close to $10 billion.
But hey, OpenAI has the money, even if it does burn a lot of cash for its modeling and compute needs, as do its competitors.
More deals
In fact, OpenAI was not the only generative AI giant to open up the checkbook last week. Anthropic took part in Goodfire’s $50 million Series A led by Menlo Ventures. San Francisco-based Goodfire helps enterprises understand and design AI models.
That investment was the first one Anthropic has made into a startup — aside from participating in Menlo’s Anthology Fund. However, it wouldn’t shock anyone if it was not the last deal — investment or even an outright acquisition — considering it has raised $4.5 billion already this calendar year.
And lest we forget, it was just late March when Elon Musk’s artificial intelligence startup, xAI, bought X, the social media platform he also owns, for $33 billion in an all-stock transaction. That was xAI’s second acquisition, per Crunchbase.
xAI is now reportedly in talks to raise $20 billion after raising $12 billion in 2024 alone. It would only make sense it will become more acquisitive — especially as its biggest rival, OpenAI, has become more opportunistic.
Of course, none of this is to say massive public companies are going to pull back on acquiring AI startups. The big news early this week was $120 billion market cap cyber giant Palo Alto Networks announcing its intent to buy Protect AI, which specializes in securing AI applications, for an undisclosed sum. The company was valued at about $400 million last summer.
Those deals will undoubtedly still occur, but do expect some privately owned AI titans to also participate in the buying fun.
Related Crunchbase Pro list:
Related reading:
- Global M&A Startup Dealmaking Sees Year-To-Year Boost In Q1
- Moveworks Delivers Big Exit For Early VCs
- AI’s Big Day — Startup Safe Superintelligence Raises $1B At Reported $5B Valuation
- Musk Merges xAI And X
Illustration: Dom Guzman
Read More
Sequoia Was Busiest Startup Investor In June, While Meta Spent The Most