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Google Lands Key AI Talent from Windsurf in $2.4 Billion Licensing Deal

By  |  July 13, 2025

Alphabet’s Google has successfully recruited several top executives and researchers from AI code generation startup Windsurf, according to announcements made Friday. The deal follows months of negotiations between Windsurf and Google’s rival OpenAI, which had explored a possible acquisition valued at $3 billion, per sources familiar with the situation cited by Reuters.

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    Unlike a traditional acquisition, Google’s agreement involves paying $2.4 billion in licensing fees to utilize certain Windsurf technologies under a non-exclusive arrangement, a person familiar with the deal told Reuters. Importantly, Google will not acquire any ownership stake or controlling interest in Windsurf, the individual added.

    Windsurf CEO Varun Mohan, co-founder Douglas Chen, and several members of the startup’s research and development team are set to join Google’s DeepMind division. According to Reuters, this newly integrated team will concentrate on advancing Google DeepMind’s agentic coding projects, particularly the Gemini initiative.

    Google confirmed the move, stating, “We’re excited to welcome some top AI coding talent from Windsurf’s team to Google DeepMind to advance our work in agentic coding,” according to a company spokesperson.

    The acquisition of talent through licensing and personnel moves echoes a growing trend among major technology firms. This approach, sometimes referred to as “acquihire,” has been increasingly employed to bolster AI capabilities while sidestepping regulatory hurdles often triggered by outright acquisitions. For example, Google previously executed a similar hiring of key staff from chatbot startup Character.AI in August 2024, Reuters reports.

    Read more: Google Fails to Sway Rivals in Final EU Talks, Risking Digital Markets Act Penalty

    Other tech giants have also embraced this strategy. Microsoft inked a $650 million deal with Inflection AI earlier this year to license AI models and hire its team, while Amazon recruited leadership from AI startup Adept in mid-2024. Meanwhile, Meta took a substantial 49% stake in Scale AI, underscoring the growing reliance on partnerships and partial investments rather than full buyouts.

    Though these arrangements avoid the need for antitrust reviews typically required for acquisitions, regulators have started scrutinizing such deals to determine if they are being used to evade oversight or suppress competition, according to Reuters.

    For Windsurf, which raised $243 million from investors including Kleiner Perkins, Greenoaks, and General Catalyst and was last valued at $1.25 billion a year ago, the deal provides significant liquidity through the licensing fees while allowing investors to maintain their ownership stakes. Most of Windsurf’s approximately 250 employees will remain with the company, which plans to double down on innovation for its enterprise clients. Windsurf’s business head Jeff Wang has stepped into the role of interim CEO, with Graham Moreno appointed president, per Reuters.

    Source: Reuters