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Google DeepMind Acquires Top AI Talent from Windsurf Amid OpenAI Deal Collapse
ByAinvest
Friday, Jul 11, 2025 6:27 pm ET1min read
OpenAI's deal to acquire AI coding startup Windsurf has fallen through, and Google DeepMind is now hiring Windsurf's CEO and top AI talent. The deal represents a "reverse-acquihire" where Google licenses Windsurf technology but does not acquire the company. Windsurf's interim CEO, Jeff Wang, will take over, and the majority of the startup's 250-person team will continue offering AI coding tools for enterprise customers.
OpenAI's planned acquisition of AI coding startup Windsurf has been derailed, with Google DeepMind now hiring the startup's CEO and key talent. The deal, which was reportedly valued at $3 billion, has been replaced by a "reverse-acquihire" arrangement where Google licenses Windsurf's technology but does not acquire the company [1][2][3].The move marks a significant shift in the AI landscape, with Google securing top talent from Windsurf to bolster its DeepMind division. Varun Mohan, CEO of Windsurf, and co-founder Douglas Chen, along with some of the startup's R&D employees, will join Google DeepMind to focus on agentic coding efforts [1][2].
Google will not have control over Windsurf nor a stake in the company. Instead, it will take a non-exclusive license to some of Windsurf's technology. This arrangement allows Windsurf to continue operating independently and license its technology to other entities. Effective immediately, Jeff Wang, Windsurf's head of business, has become interim CEO, with Graham Moreno taking on the role of president [1][2].
The majority of Windsurf's 250-person team will continue to offer its AI coding tools for enterprise customers. Windsurf's co-founders, Mohan and Chen, expressed pride in what the startup has achieved and are excited about the new phase of its journey [1][2].
The deal represents a strategic move for Google, enabling it to enhance its AI capabilities without drawing regulatory scrutiny. This reverse-acquihire strategy has been employed by other tech giants, such as Microsoft, to secure top talent in the AI sector [1].
References:
[1] https://techcrunch.com/2025/07/11/windsurfs-ceo-goes-to-google-openais-acquisition-falls-apart/
[2] https://www.theverge.com/openai/705999/google-windsurf-ceo-openai
[3] https://www.bloomberg.com/news/articles/2025-07-11/openai-s-3-billion-deal-to-buy-ai-startup-windsurf-falls-apart
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