The news: Google snatched AI coding startup Windsurf’s CEO, co-founder, and some R&D employees out from under OpenAI in a partial acqui-hire.

• Google will pay $2.4 billion for a nonexclusive license to Windsurf’s technology and “multiple years” of compensation for the employees being brought on, per The Information.
• Google’s deal with the company avoided going as far as a merger or acquisition, a move pulled from the playbooks of Amazon and Microsoft regarding Anthropic and OpenAI, respectively.

On Monday, another AI coding startup, Cognition, bought out Windsurf’s IP, product, trademark, and brand.

Poaches and purchases: These rapid-fire announcements highlight the quick-moving, and sometimes chaotic, deals coming as companies like Meta and OpenAI battle to recruit and retain AI-skilled workers.

• “The last 72 hours have been the wildest rollercoaster ride of my career,” Windsurf CEO Jeff Wang wrote on LinkedIn.
• Meanwhile, Windsurf’s IP could help Cognition become a powerful startup in the AI coding space to compete with the likes of OpenAI and Anthropic.

Cognition said that 100% of Windsurf employees will participate financially in this deal.

Goodbye, OpenAI: This puts an end to OpenAI’s plan to purchase Windsurf for about $3 billion. That deal could have attracted more regulatory scrutiny considering OpenAI’s size compared with Cognition. Those talks were also reportedly stirring up conflict between Microsoft and OpenAI.

• OpenAI wanted to exclude the deal from the revenue- and IP-sharing agreement that gives Microsoft rights to OpenAI’s IP through 2030, per The Information.
• Including the acquisition in the partnership could have helped Microsoft improve GitHub Copilot, potentially raising antitrust red flags and complicating OpenAI’s strategy.

What will Google gain? The license from Windsurf and its experienced employees gives Google access to powerful automated coding tools to streamline and accelerate software engineering and development. CEO Sundar Pichai said in April that AI generates more than 30% of new code for Google’s products.

Google could also strengthen its own AI coding product, Gemini Code Assist, to boost adoption.

Our take: Deals like this show that control over developer tools is becoming a major strategic advantage for tech companies—including smaller firms like Cognition.

These rapid-fire moves suggest the Big Tech fight for AI talent and executives is only just beginning.

Editor’s note: This story was updated to include information about Cognition’s acquisition of Windsurf’s remaining assets and staff.