Google recruits Windsurf CEO Varun Mohan, co-founder, and several AI researchers for $2.4B investment after OpenAI's $3B deal falls apart
has secured top AI coding talent from startup Windsurf in a $2.4 billion deal, hiring CEO
Varun Mohan
and co-founder
Douglas Chen
for its
DeepMind division
after OpenAI's $3 billion acquisition attempt collapsed due to Microsoft complications.
The tech giant is paying the massive sum for non-exclusive licensing rights to Windsurf's
AI coding technology
while bringing key researchers to strengthen its artificial intelligence coding capabilities. Google will not take any stake in Windsurf, allowing the startup to continue operations under interim CEO
Jeff Wang
.
Microsoft tensions derail OpenAI's windsurf purchase
OpenAI's planned acquisition unraveled when Microsoft refused to grant an exception that would prevent the tech giant from accessing Windsurf's intellectual property. Under Microsoft's existing agreement with OpenAI, the software company is entitled to access OpenAI's technology, including any acquired assets.
Windsurf leaders were concerned about sharing their proprietary AI coding technology with Microsoft, which competes directly in the space with its Copilot product. The breakdown in negotiations opened the door for Google to swoop in with a more straightforward offer from CEO Sundar Pichai and DeepMind chief Demis Hassabis.
Tech giants battle for AI coding supremacy
The deal is the latest of "acquihire" strategy employed by major companies to attract top AI talent without triggering regulatory scrutiny. Similar arrangements have seen Microsoft hire Inflection AI founders, Amazon recruit Adept AI executives, and Meta take a 49% stake in Scale AI.
Windsurf, founded in 2021 as Exafunction Inc., has emerged as one of the hottest AI coding startups, reaching approximately $100 million in annual recurring revenue by April 2025. The company had raised over $200 million from investors including Kleiner Perkins and Greenoaks Capital Partners.
The hiring of Mohan, Chen, and other Windsurf researchers will boost Google's efforts to compete with rivals like Anthropic's Claude Code and OpenAI's Codex in the rapidly growing AI-powered software development market.
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