Google DeepMind Poaches Windsurf Leadership After OpenAI Acquisition Collapses

In a dramatic turn of events, Google DeepMind has swiftly moved to hire Windsurf CEO Varun Mohan, co-founder Douglas Chen, and several top researchers, just as OpenAI’s reported $3 billion acquisition of the viral AI coding startup fell apart on Friday. This development, confirmed by a Google spokesperson to TechCrunch, signals an aggressive play in the competitive AI talent landscape.

While Google is not acquiring Windsurf itself, nor taking an equity stake, the tech giant has secured a nonexclusive license to certain Windsurf technologies. This strategic maneuver, often dubbed a ‘reverse-acquihire,’ allows Google to integrate top-tier talent and technology without the regulatory scrutiny typically associated with full company acquisitions. Google has previously employed similar tactics, as have other major tech players like Microsoft.

The failed acquisition by OpenAI, reportedly a point of contention in its ongoing negotiations with Microsoft over intellectual property access, opened the door for Google’s swift action. The exclusivity period on OpenAI’s offer had reportedly expired earlier on Friday, allowing Windsurf to explore other options.

Windsurf, which saw its annual recurring revenue surge to $100 million by April, is now left in an uncertain position. Jeff Wang, Windsurf’s head of business, has stepped in as interim CEO, with the majority of the 250-person team remaining to continue offering AI coding tools to enterprise clients. The departure of key leaders could significantly impact Windsurf’s future momentum, mirroring challenges faced by other startups whose talent was absorbed by larger corporations.

This move underscores the intense race among AI model providers to enhance their AI coding capabilities, a lucrative segment of the market. The addition of Mohan and Chen is expected to significantly bolster Google DeepMind’s efforts in developing advanced agentic coding tools, intensifying the competition with rivals like Anthropic and OpenAI in the burgeoning AI coding space.

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