OpenAI's $3 billion deal to acquire AI coding startup Windsurf has fallen apart, and instead, Google DeepMind has hired Windsurf's CEO Varun Mohan, co-founder Douglas Chen, and some top researchers. This move is seen as a strategic shift in AI development, emphasizing collaboration over acquisition.
Google DeepMind has hired the Windsurf leaders to boost its agentic coding capabilities, particularly in its Gemini project. The deal involves Google paying $2.4 billion to license Windsurf's technology and hire its leaders. Windsurf's head of business, Jeff Wang, will take over as interim CEO, and most of Windsurf's 250-person team will remain with the company, continuing to offer AI coding tools to enterprise customers.
However, the startup's future is uncertain, given the loss of its key leaders. This deal represents a reverse-acquihire strategy, where Google hires Windsurf's top talent and licenses its technology without acquiring the company outright. Google will have a nonexclusive license to certain Windsurf technology, allowing Windsurf to license its tech to others.
The implications of this move may be significant, particularly for OpenAI's partnership with Microsoft, as OpenAI didn't want Microsoft to gain access to Windsurf's AI coding technology. Other startups that have lost leaders to tech giants, like Scale AI and Inflection, have struggled to sustain momentum. The deal highlights the competitive nature of the AI industry and the importance of top talent in driving innovation.
