Last week, Honeycomb acquired Grit — an open-source query system and AI agent that helps teams programmatically search and modify codebases.
Now, OpenAI is reportedly in talks to acquire Windsurf (formerly Codeium) for $3B — another signal that the coding copilot space is entering its M&A era.
In our 2025 M&A outlook from March, we predicted coding AI agents would be prime consolidation targets due to explosive growth, surging valuations, and overlapping functionality.
Cursor, for instance, grew its valuation from $400M to $2.6B in 6 months, while Magic went from $500M to $1.7B in the same time frame.
Nvidia just warned it will take a $5.5B writedown this quarter — a direct hit from Trump’s latest export curbs on the H20 chip, which was designed specifically for the Chinese market.
The ban underscores how vulnerable even the biggest players are to shifting trade policy.
But Nvidia’s already hedging the risk.
Even as its China business gets squeezed, Nvidia is executing a dual strategy: investing heavily in AI infrastructure while ramping up acquisitions and startup bets to expand its reach across the AI ecosystem.
It’s made 5 AI acquisitions in under 12 months — including Lepton AI and Gretel just this year — and tied Google for most AI startup investments among big tech players in 2024, according to CB Insights data.
As we noted this past Tuesday, the broader trade war is creating market whiplash just as big tech commits record capex to AI.
Nvidia’s M&A and venture push suggests it’s not just reacting — it’s diversifying, vertically integrating, and deepening its moat.
OpenAI is reportedly testing a social media platform built around ChatGPT’s image generation and structured like a social feed.
It’s the latest escalation in a brewing showdown with social media heavyweights like Meta, which plans to spin out its chatbot, Meta AI, into a standalone app.
While Meta has 700M+ users already engaging with AI features, OpenAI’s user base is growing rapidly. ChatGPT hit 400M weekly active users in February, and Sam Altman said last week that that figure is now at 500M+ following the popularity of its latest image generation model.
While OpenAI has the viral factor on its side, Meta’s experience in the social realm, combined with its existing algorithms, could give it an edge in creating AI that feels like it belongs in human conversations.
Whether OpenAI’s social app launches or not, the battle for user attention is already underway.
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