Google has secured a major AI talent acquisition, hiring key executives and engineers from Windsurf, an AI code-generation startup that was previously in acquisition talks with OpenAI. As part of the unusual deal structure, Google will pay $2.4 billion in licensing fees to access some of Windsurf’s technology under non-exclusive terms, without taking an ownership stake. Windsurf CEO Varun Mohan, co-founder Douglas Chen, and several R&D team members will now join Google DeepMind, where they will focus on advancing agentic coding for the Gemini project.
The move comes after months of negotiations between Windsurf and OpenAI, which had reportedly considered acquiring the startup for up to $3 billion, according to sources familiar with the matter. The fierce competition underscores the growing demand for AI-powered coding tools, one of the fastest-growing segments in artificial intelligence. While OpenAI declined to comment, Google confirmed the hiring in a statement, saying it was “excited to welcome top AI coding talent” to its DeepMind team.
For Windsurf’s investors—including Kleiner Perkins, Greenoaks, and General Catalyst—the deal provides a lucrative exit opportunity while allowing them to retain equity. The startup, last valued at $1.25 billion, has raised $243 million to date. The licensing fee offers immediate liquidity, a rare win in today’s tight funding environment. The arrangement mirrors Google’s 2024 acquihire of employees from Character.AI, highlighting Big Tech’s aggressive tactics to secure AI expertise while avoiding full acquisitions that might attract regulatory scrutiny.
The trend of talent-focused deals is accelerating across Silicon Valley, with Microsoft, Amazon, and Meta also pursuing similar strategies. Critics argue these moves allow tech giants to sidestep antitrust concerns while still dominating emerging AI markets. With AI coding tools becoming increasingly vital, Google’s latest play strengthens its position in the race against OpenAI—but the battle for AI supremacy is far from over.