Google invests $2.4 billion to acquire top talent and technology licensing from Windsurf to advance its AI coding ambitions

Google pays $2.4 billion in licensing fees

Sources say Windsurf investors will gain liquidity while retaining their shares

Reuters, July 11 - Google, a subsidiary of Alphabet (GOOGL.O), and AI coding startup Windsurf announced on Friday that Google has hired several key employees from Windsurf, an unexpected move following its competitor OpenAI's attempt to acquire Windsurf.

According to a person familiar with the arrangement, as part of the deal, Google will pay $2.4 billion in licensing fees for non-exclusive rights to use some of Windsurf's technology. The person added that Google will not hold any shares or controlling interest in Windsurf.

Windsurf CEO Varun Mohan, co-founder Douglas Chen, and some members of the coding tools development team will join Google's DeepMind AI division.

Sources familiar with the matter told Reuters in June that Windsurf had been in discussions with OpenAI for several months, hoping to sell itself in a deal potentially worth $3 billion, highlighting the growing interest in the coding field, which has become one of the fastest-growing applications of AI.

Reporters were unable to reach OpenAI for comment immediately.

The former Windsurf team will focus on Google's DeepMind's agent coding program, primarily responsible for the Gemini project.

Google stated in a press release, "We are excited to welcome some of the top AI coding talent from the Windsurf team to Google DeepMind to advance our work in agent coding."

Sources told Reuters that Windsurf's investors will gain liquidity through the licensing fees while retaining their shares in the company