Google Makes a Big Move to Boost AI Coding Capabilities
Google has signed a significant $2.4 billion deal to bring in top talent from startup Windsurf. The tech giant has hired CEO Varun Mohan and co-founder Douglas Chen for its DeepMind division. This decision comes after OpenAI’s attempt to acquire Windsurf for $3 billion fell through due to complications with Microsoft.
As part of the deal, Google is acquiring non-exclusive licensing rights to Windsurf’s AI coding technology while ensuring that Windsurf can continue its operations with interim CEO Jeff Wang at the helm.
OpenAI’s Plans Foiled by Microsoft
OpenAI’s acquisition plans hit a snag when Microsoft refused to allow an exception that would protect Windsurf’s intellectual property. According to an existing agreement, Microsoft has access to OpenAI’s technology, which includes any assets acquired. Leaders at Windsurf expressed concern about their proprietary technology being shared with Microsoft, which has a competing product called Copilot. This breakdown created an opportunity for Google to step in with a more straightforward offer led by CEO Sundar Pichai and DeepMind head Demis Hassabis.
AI Talent War Intensifies
This latest move is part of a broader trend known as “acquihiring,” where large tech companies buy smaller firms mainly to attract talented individuals. Other companies, including Microsoft, Amazon, and Meta, have also pursued similar strategies recently.
Windsurf, founded in 2021 as Exafunction Inc., has quickly become a standout in the AI coding landscape, reaching nearly $100 million in annual revenue by April 2025. The startup has received over $200 million in funding from investors like Kleiner Perkins and Greenoaks Capital Partners.
With the addition of Mohan, Chen, and other Windsurf researchers, Google aims to strengthen its competitive edge against rivals such as Anthropic and OpenAI in the booming market of AI-powered software development.
