Google has joined Silicon Valley’s scramble to scoop up artificial intelligence engineers, hiring the leaders of Windsurf, a start-up that developed an A.I.-powered computer programming tool, in a $2.4 billion deal.
The move, which became public on Friday, was the latest example of how tech companies are waging battles to suck up A.I. talent. The deal deepens Google’s bench of A.I. engineers while also scoring it a point against OpenAI, one of its biggest challengers in the field.
In May, OpenAI was in talks to acquire Windsurf in a $3 billion deal that would help add thousands of new customers and expand OpenAI’s offerings. But the talks broke down in recent weeks because Windsurf’s leaders had concerns about the information it might have to share about its product with Microsoft, one of OpenAI’s largest investors, two people with knowledge of the deal said.
Under Google’s agreement, Varun Mohan, the chief executive of Windsurf, and Douglas Chen, a co-founder, will join Google DeepMind, the company’s A.I. division, along with several of Windsurf’s research and development employees. Google is also paying for a nonexclusive license for Windsurf technology.
“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,” Google said in a statement. As part of the statement, Mr. Mohan and Mr. Chen said they were excited to join Google.
The Verge and The Information earlier reported on Windsurf’s deal.
Silicon Valley giants including Meta have lately poached A.I. talent from rivals and start-ups, sometimes offering compensation packages as high as $100 million. Google has chosen to pay to bring on top A.I. talent from start-ups rather than acquiring the smaller businesses outright. In 2023, Google agreed to pay $3 billion to license technology from Character.AI, a chatbot start-up. The deal allowed Google to hire Noam Shazeer and Daniel De Freitas, who both had left Google to start Character.ai.
During the Biden administration, investments by tech giants in A.I. start-ups drew attention from regulators, who were concerned that the deals were structured to sidestep scrutiny. The Federal Trade Commission and Justice Department review acquisitions to make sure they do not reduce competition, but they typically do not review licensing agreements or hires.
Google’s window to negotiate with Windsurf opened when talks between the start-up and OpenAI faltered and a deal exclusivity agreement between the two companies expired, the two people familiar with the conversations said.
Complications in those talks arose over some of the terms of Microsoft’s agreement with OpenAI, the people said. Microsoft’s investment requires OpenAI to share intellectual property around technology as part of any acquisition. OpenAI asked for an exception so it would not have to share such data related to Windsurf, but Microsoft declined to grant one, the people said.
Microsoft has made exceptions in the past, including with OpenAI’s recent purchase of IO, a hardware device start-up founded by Jony Ive, Apple’s former design chief, the people said. Microsoft accommodated the IO deal because the company did not see itself in the A.I. hardware consumer device business, the people said.
That was not the case with Windsurf, which creates A.I.-powered coding software, a business that Microsoft competes in with its own product, Copilot.
After the exclusivity agreement expired, Windsurf began talking to other companies, the people said. Sundar Pichai, Google’s chief executive, and Demis Hassabis, who runs DeepMind, offered a straightforward deal with fewer potential issues, the people said.
An OpenAI spokeswoman confirmed that the company’s exclusivity agreement with Windsurf had expired and declined to comment further. A Microsoft spokesman declined to comment.
Windsurf said Jeff Wang, its head of business, would become its interim chief executive.
(The New York Times has sued OpenAI and Microsoft, accusing them of copyright infringement regarding news content related to A.I. systems. OpenAI and Microsoft have denied those claims.)
Tripp Mickle reports on Apple and Silicon Valley for The Times and is based in San Francisco. His focus on Apple includes product launches, manufacturing issues and political challenges. He also writes about trends across the tech industry, including layoffs, generative A.I. and robot taxis.
Mike Isaac is a technology correspondent for The Times based in San Francisco. He regularly covers Facebook and Silicon Valley.
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