Google’s DeepMind has managed to outmaneuver OpenAI by striking a $2.4 billion deal with AI startup Windsurf. The move comes after OpenAI’s $3 billion bid to acquire Windsurf failed when its exclusivity window expired, allowing other suitors to enter the fray.
Windsurf, known for its innovative AI coding platform, has been a coveted player in the AI space. OpenAI had long been negotiating a full acquisition to strengthen its AI development tools and talent pool. However, the lapse of exclusivity opened the door for Google to act swiftly and strategically.
Rather than acquiring Windsurf outright, Google has opted for a tactical approach. DeepMind, Google’s premier AI research division, confirmed it has hired Windsurf’s CEO Varun Mohan and co-founder Douglas Chen, along with a select group of key engineers. While Windsurf will remain an independent company, Google’s $2.4 billion deal grants it a nonexclusive license to some of Windsurf’s core technologies.
This arrangement allows Google to benefit from Windsurf’s breakthrough tools and intellectual property without assuming ownership or operational control of the startup. It also aligns with Google’s ongoing strategy of strengthening DeepMind’s coding and model-training capabilities, especially as the competition with OpenAI intensifies.
For OpenAI, the failed acquisition marks a significant setback. The company had aimed to integrate Windsurf’s cutting-edge code generation tools into its own portfolio, potentially enhancing products like ChatGPT and Codex. Now, it faces the reality of losing not just a promising tech partner, but also valuable talent and proprietary insights to a key rival.
The Verge, which first reported the story, noted that Windsurf stands to gain financially while continuing to chart its own course as an independent player. Meanwhile, DeepMind’s timely intervention reaffirms Google’s aggressive posture in the AI arms race emphasizing that even without a full buyout, talent and tech licensing can shift the power balance in this fiercely contested space.
