Alphabet (GOOGL) Seals $2.4B Windsurf Deal to Fuel AI Coding Race

July 14 - Alphabet's Google GOOGL is spending about $2.4 billion to secure AI coding talent and licensing rights from startup Windsurf.

The agreement follows months of talks between Windsurf and OpenAI over a potential $3 billion acquisition, which faltered partly amid friction with Microsoft MSFT.

Under the terms, Windsurf CEO Varun Mohan and co?founder Douglas Chen will join Google's DeepMind division, along with several senior R&D staff. The recruits are set to focus on agentic coding tools within Google's Gemini AI platform.

Google also obtained a nonexclusive license to key Windsurf technologies, allowing the startup to continue offering its innovations to other firms. The $2.4 billion covers both licensing fees and compensation for incoming personnel.

With tech giants competing to create the next wave of AI innovations, Google wants to strengthen its code-writing options and have an advantage over the competitors in the rapidly changing AI environment.