OpenAI Scraps Windsurf Deal as Team Joins Google DeepMind

OpenAI has officially ended its planned acquisition of AI coding startup Windsurf. Instead, several of Windsurf’s top leaders and researchers—including CEO Varun Mohan and cofounder Douglas Chen—are joining Google DeepMind. The announcement was made jointly by Google and Windsurf on Friday. The team will contribute to Google DeepMind’s agentic coding initiatives, focusing on the company’s Gemini AI model. Although Google is not acquiring Windsurf or taking any ownership in the startup, it will receive a non-exclusive license to use some of Windsurf’s technology. In light of the leadership shift, Windsurf has appointed Jeff Wang, formerly head of business, as interim CEO. Graham Moreno, the company’s VP of global sales, will now serve as president. Chris Pappas, a spokesperson for Google, expressed enthusiasm about the new hires, stating that Gemini is among the most advanced models available for developers. He noted that bringing in leading AI coding talent from Windsurf would support DeepMind’s mission to expand capabilities in agentic coding. In a joint statement, Mohan and Chen said they were excited to join Google DeepMind and proud of the progress Windsurf has made over the past four years. They also voiced confidence in the remaining team’s ability to lead the company into its next phase. Google has not disclosed financial details regarding the team’s hiring. However, the move comes after previous reports that OpenAI had been in talks to acquire Windsurf for approximately $3 billion. This development marks a significant shift in the competitive landscape of AI research and talent acquisition, with Google securing key minds originally expected to join its rival, OpenAI. The redirection of Windsurf’s leadership and research staff to DeepMind could strengthen Google’s position in developing AI systems capable of autonomous coding and complex task execution. While Windsurf continues as an independent entity, the reshuffling highlights the growing demand for skilled AI researchers and the high-stakes competition between tech giants in advancing cutting-edge models like Gemini.