Google Acquires AI Startup Windsurf for $2.4 Billion, Technology Licensing Included

Google has agreed to pay $2.4 billion to acquire AI programming startup Windsurf for technology licensing and to hire its CEO and some employees. This deal follows stalled negotiations between Windsurf and OpenAI. The acquisition aims to enhance Google's AI capabilities and compete with rival tech companies.

Google has agreed to pay $2.4 billion to license technology from AI programming startup Windsurf and recruit its CEO and select employees into its DeepMind division. This strategic move follows stalled negotiations between Windsurf and OpenAI. The acquisition aims to enhance Google's AI capabilities and bolster its competitive position in the rapidly evolving AI coding landscape.

According to reports from TechCrunch [1], Google DeepMind has hired Windsurf's CEO Varun Mohan, co-founder Douglas Chen, and several key engineers. The deal does not involve Google acquiring Windsurf but rather securing a non-exclusive license to certain technologies. This move is part of a growing trend of "reverse-acquihires," where major tech firms hire top talent and license technology without acquiring the entire company.

Windsurf, previously known as Codeium, had reached an annual recurring revenue (ARR) of $100 million in April 2025, making it one of the hottest AI coding startups on the market. The company's technology has been in high demand, with major tech firms vying for its capabilities. However, OpenAI's $3 billion bid to acquire Windsurf reportedly fell apart due to contract renegotiations with Microsoft, which already holds access to OpenAI's intellectual property [2].

Following the leadership exits, Jeff Wang, Windsurf's head of business, has stepped in as interim CEO. Most of the 250-person team will continue focusing on enterprise AI coding tools, but the company's long-term trajectory remains uncertain. Similar reverse-acquihire startups like Scale AI and Inflection have struggled to maintain momentum post-deal.

The deal is expected to significantly boost Google's ability to build AI coding tools, as the company aims to stay competitive in the AI race. As AI model providers increasingly focus on offering AI coding applications to entice developers, Google's acquisition of Windsurf's talent and technology positions it well to capitalize on this trend.

References:
[1] https://techcrunch.com/2025/07/11/windsurfs-ceo-goes-to-google-openais-acquisition-falls-apart/
[2] https://tribune.com.pk/story/2555453/openai-left-behind-as-windsurfs-stars-defect-to-google-deepmind