Windsurf CEO Takes Position at Google; OpenAI Acquisition Falls Through

Reports indicate that OpenAI’s anticipated acquisition of the viral AI coding startup Windsurf has fallen through, according to The Verge.

In a surprising twist, Google DeepMind is actively recruiting Windsurf CEO Varun Mohan, co-founder Douglas Chen, and several key AI coding experts from the startup. A representative from Google confirmed the hiring of Windsurf’s leadership in a statement to TechCrunch.

“We are excited to welcome some of the leading AI coding talent from the Windsurf team to Google DeepMind to strengthen our initiatives in agentic coding,” stated Google spokesperson Chris Pappas in an email to TechCrunch.

Notably, Google will not acquire equity in Windsurf and will not hold any control over the company. Nevertheless, Google will secure a nonexclusive license for specific Windsurf technologies, enabling the AI coding startup to continue licensing its technology to other organizations.

This development represents yet another instance of a reverse acquihire in the AI sector, where a company recruits top talent from a startup while licensing its technology without fully acquiring the firm. Google has previously undertaken similar arrangements, such as the recruitment of Character.AI CEO Noam Shazeer, while Microsoft brought on Mustafa Suleyman. These strategic actions have helped major tech firms strengthen their positions in the AI arena without triggering regulatory scrutiny.

“We are excited to join Google DeepMind alongside members of the Windsurf team,” remarked Mohan and Chen in a statement to TechCrunch. “We are proud of what we have accomplished at Windsurf over the last four years and are eager to watch it progress with their outstanding team as we embark on the next phase.”

As of Friday, Windsurf’s head of business, Jeff Wang, announced on social media that he will step in as interim CEO for the startup. The majority of Windsurf’s 250-person team will not be joining Google DeepMind and will continue to offer their AI coding tools to enterprise clients.

This story is ongoing …