OpenAI looked at Cursor before considering deal with rival Windsurf

Before entering into talks to acquire artificial intelligence code-writing startup Windsurf, OpenAI looked at buying another option: Cursor.

The ChatGPT creator last year reached out to Anysphere, the startup that sells the Cursor application, two people familiar with the matter told CNBC. OpenAI reached out again this year as Cursor was enjoying a new wave of popularity. The talks again failed to gain traction, one of the people said.

OpenAI declined to comment. Anysphere did not respond to a request for comment. Bloomberg reported last month that Anysphere was in talks to raise funding at a valuation of close to $10 billion.

OpenAI has recently engaged in talks to pay about $3 billion to acquire AI coding tool Windsurf, CNBC reported Wednesday, following a story published by Bloomberg. Should a Windsurf deal take place, it would be by far OpenAI’s most expensive acquisition to date.

Sam Altman, OpenAI co-founder and CEO, said on social media site X that his company’s new o3 and o4-mini reasoning models, released on Wednesday, are “super good at coding, so we are releasing a new product, Codex CLI, to make them easier to use.” Anysphere said on X that the two new large language models, or LLMs, are available now in Cursor.

Cursor’s desktop application gained popularity last year for providing coding assistance by drawing from Anthropic’s Claude 3.5 Sonnet model. In October, Microsoft added support for Anthropic’s Sonnet model in its GitHub Copilot assistant, and weeks later, some programmers reported that Cursor was preferable to Microsoft’s GitHub Copilot.

The world’s top technology companies are spending hundreds of billions of dollars to build data centers full of Nvidia graphics processing units that can build and run these LLMs. The models are being deployed across the corporate world, in areas such as sales, customer service and law. 

Some of the biggest advances have come from applying AI to software. It has gotten so good that tech companies have found themselves trying to catch coders who use AI to cheat in job interviews, CNBC reported in March.

Marking the shift in that sentiment was a February post on X by OpenAI co-founder Andrej Karpathy. He coined the term “vibe coding” to describe the process of directing AI to write code. Karpathy mentioned Cursor and Anthropic’s Sonnet in the post, and did not refer to OpenAI models.

Since then, the tech industry has flocked to Cursor and numerous similar services, including Bolt, Replit and Vercel. More than one million people were using Cursor every day as of March, according to Bloomberg.

OpenAI met with more than 20 companies in the AI coding domain, according to a person familiar with the matter.

Anysphere, based in San Francisco, was founded in 2022 and was generating upward of $100 million in recurring revenue as of January. Investors include Andreessen Horowitz, Benchmark, Thrive Capital and the OpenAI Startup Fund. Cursor is based on Microsoft’s open-source Visual Studio Code editor.

— CNBC’s Hayden Field contributed to this report.