OpenAI’s $3 billion bid to buy artificial intelligence (AI) coding startup Windsurf crumbled late Friday, and rival Alphabet Inc.’s Google quickly picked up the pieces: The search engine giant said it has struck a deal to acquire top Windsurf executives and licensing rights to some Windsurf technology.
Google announced the hiring of Windsurf CEO Varun Mohan and company co-founder Douglas Chen, along with staffers, to work at its DeepMind AI unit on agentic coding, based on multiple reports Friday.
Google declined to provide financial terms of the deal. But it disclosed it is not taking a stake in Windsurf and will not have any control over the company. As part of the deal, Google gets a nonexclusive license to certain Windsurf technology, though the startup remains free to license its technology to others.
“We’re excited to welcome some top AI coding talent from Windsurf’s team to Google DeepMind to advance our work in agentic coding,” a Google spokesperson said. “We’re excited to continue bringing the benefits of Gemini to software developers everywhere.”
In a separate statement, Mohan and Chen said, “We are proud of what Windsurf has built over the last four years and are excited to see it move forward with their world-class team and kick-start the next phase.”
Mohan will reportedly focus on agentic coding initiatives at DeepMind, primarily on the Gemini project.
Jeff Wang, Windsurf’s head of business, will take over as the company’s interim CEO, he announced in a post on social media. Most of Windsurf’s 250-person workforce remains at the company.
The shocking twist, first reported by The Verge, comes as tech giants such as Alphabet, Meta Platforms Inc., and Microsoft Corp. relentlessly pursue high-profile acquisitions and offer multi-million-dollar pay packages to attract top talent in the race to lead the next wave of AI.
OpenAI’s potential purchase of Windsurf was a source of heightened tensions between the maker of ChatGPT and Microsoft, whose Copilot competes with Windsurf, according to a Business Insider report. Microsoft has invested more than $13 billion in OpenAI.
OpenAI was not immediately available for comment.
