Silicon Valley is on an acquisition spree—though not in the traditional sense. Instead of outright purchases, major A.I. companies are striking “acqui-hire” deals, poaching top talent from promising startups. The latest example comes from Google, which is bringing on several executives from the A.I. software firm Windsurf in a new multibillion-dollar deal.
Among those joining Google’s DeepMind division are Windsurf CEO Varun Mohan and co-founder Douglas Chen. The pair, along with other members of their team, will focus on building agentic coding tools. “We are proud of what Windsurf has built over the last four years and are excited to see it move forward with their world class team and kick-start the next phase,” said Mohan and Chen in a statement.
Founded in 2021, Windsurf specializes in developing A.I. assistants to help developers write code. The company has raised $243 million to date, according to Crunchbase. In the wake of the leadership transition, Jeff Wang, Windsurf’s current head of business, will step up as interim CEO effective immediately.
Initially, it seemed OpenAI would be the one to acquire Windsurf. The ChatGPT maker was hoping to buy out the startup for $3 billion. However, those plans reportedly fell through due to OpenAI’s close partnership with Microsoft. Concerned about giving Microsoft access to Windsurf’s intellectual property, OpenAI ultimately walked away from the acquisition.
Google isn’t just hiring Windsurf’s staffers; it has also struck a non-exclusive licensing agreement to use some of Windsurf’s technology. The deal, which is valued at $2.4 billion, does not involve Google taking an equity stake in Windsurf, according to the Wall Street Journal.
“We’re excited to welcome some top A.I. coding talent from Windsurf’s team to Google DeepMind to advance our work in agentic coding,” said Google in a statement, adding that it is currently focused on enhancing advanced the developer capabilities of Gemini.
A surge in A.I. acqui-hires
This isn’t the first time Google has pursed an acqui-hire to bring top A.I. talent on board. Last year, the company paid $2.7 billion in a similar deal with Character.AI, licensing the chatbot maker’s technology and hiring its co-founders, Noam Shazeer and Daniel De Freitas.
These types of hiring deals have become increasingly common as major tech firms seek to expand their A.I. teams while sidestepping the regulatory scrutiny that often accompanies traditional acquisitions or mergers. Still, the recent wave of acqui-hires—including Microsoft’s $650 million licensing and hiring deal with Inflection AI and a similar partnership between Amazon and Adept—have drawn attention from antitrust authorities.
In one of the largest acqui-hires to date, Meta last month recruited Scale AI founder Alexandr Wang, along with members of his team, to join a newly formed A.I. group. The move followed Meta’s investment of more than $14 billion in Scale AI, through which it secured a non-voting stake in the startup.