OpenAI's $3 billion deal to acquire Windsurf fell apart, leading Google DeepMind to hire Windsurf's CEO Varun Mohan, co-founder Douglas Chen, and top researchers. Google confirmed the hiring, aiming to advance their work in agentic coding. This deal is a reverse-acquihire, where Google licenses Windsurf's technology without acquiring the company, similar to past deals with Character.AI and Microsoft.
Windsurf's head of business, Jeff Wang, will become interim CEO. Most of Windsurf's 250-person team will continue offering AI coding tools for enterprise customers. OpenAI's failed acquisition caused tension with Microsoft. Windsurf's ARR reached $100 million in April, attracting interest from OpenAI and Google.
The addition of Windsurf's leaders could boost Google's AI coding tools, aligning with the industry trend of offering AI coding applications. Windsurf's future is uncertain, as other AI startups have struggled after similar deals.