According to The Verge, Openai’s contract to acquire Viral AI Coding Startup Windsurf for $3 billion.
With a shocking twist, Google Deepmind currently employs Windsurf CEO Varun Mohan, co-founder Douglas Chen, and some of the top researchers at startups. A Google spokesman confirmed the employment of Windsurf leaders in a statement to TechCrunch.
“We welcome the talent in top AI coding from Windsurf to Google Deepmind to work on agent coding,” Google spokesman Chris Pappas said in an email to TechCrunch.
In particular, Google has not acquired any shares in Windsurf and has no control over the company. However, as part of the transaction, Google will obtain a non-learning license for certain Windsurf technologies. In other words, AI coding startups are free to leave their technology licensed to other technologies.
The deal represents the latest reverse app for the AI ecosystem. In this inversely, companies hire top startup talents and license their technology, but do not acquire the company entirely. Google previously had similar contracts to hire Back Character.ai CEO Noam Shazeer, just like Microsoft to hire Mustafa Suleyman. These transactions have helped several large tech companies to raise their position in the AI race without regulatory scrutiny.
“We look forward to joining Google Deepmind with some of the Windsurf team,” Mohan and Chen said in a statement from TechCrunch. “We are proud of what Windsurf has built over the last four years and are excited to see them move forward with a world-class team and kickstart the next phase.”
As of Friday, Windsurf’s business director Jeff Wang took over as interim CEO of the startup, making an announcement in a social media post. Most Windsurf’s 250-person team will not head to Google DeepMind and will continue to provide AI coding tools for enterprise customers.
Openai’s deal to acquire Windsurf is reportedly a major tension in renegotiating ChatGpt Maker’s contract with Microsoft. Microsoft currently has access to all of Openai’s intellectual property. However, Openai also didn’t want it to acquire Windsurf’s AI coding technology from its biggest supporters, according to a previous report from the Wall Street Journal.
Earlier on Friday, Fortune reported that the exclusivity period for the offer, which Open would acquire Windsurf, had expired. This means that Windsurf is now free to explore other offers. It seems that Windsurf didn’t wait long.
In recent months, Windsurf has been one of the hottest AI coding startups on the market. In April, the startup’s ARR reached around $100 million, and TechCrunch had previously risen from around $40 million. Its rapid growth has attracted suitors such as Openai and Google.
The addition of Mohan, Chen and other Windsurf readers could significantly improve Google’s ability to build AI coding tools. Over the past few months, AI model providers have focused on providing AI coding applications that seduce developers. Humanity has significantly increased revenues at the back of Claude Code, an AI coding tool, but Openai continues to sell Codex, an AI coding agent, to software engineers.
Windsurf, meanwhile, remains in a much more uncertain position as a result of this transaction. Other AI startups whose leaders have been hired have struggled to maintain the same momentum they had beforehand. As a result of a deal with Meta, AI lost its customers, but after trading with Microsoft, the change had to pivot completely from consumer AI.
Windsurf seems likely to suffer from a similar fate.
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