OpenAI Windsurf Deal Collapses, Google Hires Key Talent

OpenAI's $3 billion acquisition attempt of AI coding startup Windsurf collapsed after the exclusivity period expired, enabling Google DeepMind to hire CEO Varun Mohan, co-founder Douglas Chen, and key team members. Google secured a nonexclusive license to some of Windsurf’s technology, while Windsurf remains independent and retains most of its 250-person team. Jeff Wang has been appointed interim CEO, and Windsurf plans to continue serving enterprise customers and advancing its technology. The move is described as a 'reverse-acquihire,' allowing Google to strengthen its agentic coding capabilities with top talent without regulatory barriers. This setback for OpenAI comes as competition intensifies in the AI coding assistant market, including rivals like Microsoft's GitHub Copilot and Cursor. Windsurf's founders expressed optimism for both their work at Google DeepMind and the startup's independent future.