OpenAI's windsurf acquisition falls through as Google hires key talent, including its CEO

OpenAI’s planned $3 billion acquisition of AI coding startup Windsurf has been called off, according to reports from The Verge. Instead, Google is bringing on Windsurf’s CEO Varun Mohan, cofounder Douglas Chen, and several of the company's R&D staff.

The former Windsurf team members will join Google DeepMind, focusing on agentic coding and projects related to Google Gemini. While Google has secured a non-exclusive license to use some of Windsurf’s technology, it has not acquired any stake in the company nor obtained corporate control. As part of this arrangement, Bloomberg reports Google will pay $2.4 billion for the technology license and to on-board key personnel.

Following this transition, Jeff Wang becomes interim CEO of Windsurf and Graham Moreno has been promoted to president. Windsurf retains the right to license its technology to other companies, despite Google’s licensing deal. Google, meanwhile, emphasized its continued investment in developer tools and AI coding with Gemini, underlining the strategic value of Windsurf’s capabilities.