OpenAI, Windsurf, and the future of work

OpenAI is reportedly in talks to buy Windsurf for $3 billion. They tried to buy Cursor last year too, according to CNBC.

On paper Windsurf doesn't seem that hard to build - just fork VS Code, add an agent, some autocomplete, and indexing. It's surprising that OpenAI, a $300B company, isn't just doing this themselves.

Jake Handy's piece on The Modern AI Workspace offers an explanation for why OpenAI might really be interested in this kind of acquisition (he only talks about Cursor, but it applies to Windsurf as well):

Traditional productivity tools like Microsoft Office, Google Workspace, or Notion are powerful, but they lack something crucial: an AI that can take direct action on your files and folders.

This is where Cursor shines in unexpected ways.

By opening a root workspace folder in Cursor for your daily non-coding tasks (be it writing, research, project management, or content creation), you're essentially giving an AI assistant direct access to help organize, edit, and enhance your work....

Cursor's built-in Git integration offers another significant advantage, especially in content writing contexts. Even for non-coders, Git allows you to track every change to your documents, revert to previous versions when needed, and maintain a complete history of your work....

As AI agents continue to evolve, the lines between coding and non-coding tools can and will blur. Cursor (and Windsurf) represents an early example of what's possible when we expand our thinking about development tools beyond their original purpose.

In other words, Cursor and Windsurf aren't just good developer tools; they could potentially become the AI-powered workspaces of the future, beginning with code but expanding to everything we do on our computers.

There are already real examples of this expansion. The Pragmatic Engineer wrote about hooking up a Windsurf MCP server to PostgreSQL. Then he could use Windsurf to ask his database questions:

• "Has there been an unusual spike of signups the last 2 months?"
• "Which suspicious-looking emails have signed up recently? Any patterns?"
• "Which domains have the most signups?"
• "How many unclaimed promo codes are left?"

Windsurf would not be the first developer-oriented tool to become a mainstream application. IRC was used by nerds and gamers until Slack made it pretty and turned it into a $27 billion business (Discord later did something similar).

Jamin Ball made another good point about why OpenAI might want Windsurf – the usage data from users interacting with models. Just like with ChatGPT, collecting feedback on how users interact with models is gold. Windsurf's usage data could help OpenAI's models catch up to Anthropic's on coding benchmarks.

The competitive landscape is getting messy:

• GitHub Copilot just launched agent mode – so Microsoft now is directly competing with Cursor and Windsurf.
• OpenAI's startup fund is invested in Cursor – but now they're buying their #1 competitor.
• Microsoft's invested heavily in OpenAI – but their Copilot product competes directly with Cursor and Windsurf.
• Oh, and VS Code (Microsoft's baby) is the open source foundation of both Cursor and Windsurf.