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Google Bolsters DeepMind with Windsurf Talent in Multi-Billion Dollar AI Licensing Deal

In a high-stakes move underscoring the intensifying war for artificial intelligence dominance, Google has struck a $2.4 billion agreement to onboard Varun Mohan, CEO and co-founder of Windsurf, a fast-growing AI coding startup, along with several other senior R&D engineers.

The deal, announced Friday, is not a full acquisition. Instead, Google is licensing Windsurf’s technology on a nonexclusive basis, meaning Windsurf can still partner with or license to other entities. This strategic pivot allows Google to supercharge its AI capabilities—particularly around agentic coding—without acquiring the entire company.

“We’re excited to welcome some top AI coding talent from Windsurf’s team to Google DeepMind,” said a Google spokesperson. “This move will help advance our agentic coding efforts and continue bringing the benefits of Gemini to developers everywhere.”

What’s in the Deal?

The $2.4 billion sum includes:

• Nonexclusive licensing rights to Windsurf’s proprietary AI coding tools.
• Compensation packages for the engineers and executives transitioning to Google.
• No equity investment in Windsurf itself.

Windsurf will continue to operate independently, with Jeff Wang—formerly head of business—stepping in as interim CEO. “Most of Windsurf’s world-class team will continue to build the Windsurf product with the goal of maximizing its impact in the enterprise,” Wang wrote on X.

Windsurf’s Rapid Rise and OpenAI’s Missed Opportunity

Founded just a few years ago, Windsurf gained traction by pioneering a new category of software development called vibe coding—a flexible approach using next-gen AI tools that enable both developers and non-coders to generate usable software.

The company was in exclusive acquisition talks with OpenAI for a $3 billion deal earlier this year, according to CNBC. However, that exclusivity period lapsed without a finalized agreement. An OpenAI spokesperson confirmed the negotiations ended.

With Google swooping in, the missed opportunity highlights how hyper-competitive and fast-moving the AI talent market has become.

The New AI Talent Arms Race

The Windsurf deal comes amid a wave of talent consolidation by Big Tech companies determined to own the future of AI-powered software:

• Meta recently hired multiple ex-OpenAI engineers and appointed Alexandr Wang, founder of Scale AI, to lead its AI strategy.
• Microsoft absorbed top minds from Inflection AI and invested in agent mode features in Visual Studio Code, which now generates 30% of Microsoft’s code, according to CEO Satya Nadella.
• Amazon made a similar move with its investment in Adept AI, bringing on key researchers.

Google is no stranger to this approach. It previously hired a group from Character.AI, another buzzy AI startup, following the same playbook—targeting select high-impact hires without a full-scale acquisition.

What’s Next for Windsurf and Google?

While Windsurf remains an independent entity, the departure of its CEO and several engineers to Google suggests a deep collaboration ahead, especially within DeepMind’s Gemini framework.

For Google, the move aligns with its broader strategy of embedding AI more deeply into developer tools and cloud infrastructure. The focus on agentic coding—systems that can intelligently assist in writing, debugging, and deploying software—is seen as a critical next step in developer productivity and automation.

The Verge first reported details of the Google-Windsurf agreement on Friday.

With this latest move, Google makes it clear: the fight for AI dominance is no longer just about models—it’s about people.