Tech giant Alphabet’s (GOOGL) Google is spending $2.4 billion to acquire top talent and licensing rights from Windsurf, an emerging AI coding startup. The deal highlights Google’s growing focus on both intellectual property and human capital as it looks to compete with rivals like OpenAI and Anthropic.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
The deal came after months of talks between Windsurf and OpenAI over a potential $3 billion acquisition, underscoring the growing interest in code generation. The deal reportedly fell apart partly due to friction with Microsoft (MSFT).
Google Boosts AI Coding Push with Windsurf Deal
Google is bringing on Windsurf CEO Varun Mohan and co-founder Douglas Chen to join its DeepMind AI division. In addition, several of Windsurf’s senior R&D staff will also join Google as part of the agreement. Notably, Mohan and the Windsurf team will concentrate on agentic coding initiatives at DeepMind, with much of their work centered around the company’s Gemini AI platform.
Furthermore, Google has secured a nonexclusive license to certain Windsurf technologies, allowing the startup to continue licensing its innovations to other firms. According to a person familiar with the deal, Google is paying $2.4 billion, covering both licensing fees and compensation for the incoming Windsurf talent.
AI Talent War Heats Up
Tech giants are racing to hire top talent as competition intensifies in the rapidly evolving AI space. These companies are offering premium salaries and strategic roles to secure the minds behind next-gen AI breakthroughs.
For instance, Meta Platforms (META) has been actively recruiting talent from OpenAI, with CEO Mark Zuckerberg personally involved in interviewing and overseeing hires for the company’s newly formed Superintelligence team. Most recently, Meta hired Ruoming Pang, Apple’s (AAPL) former AI chief, with a massive paycheck. Bloomberg reported that Pang was offered over $200 million, one of the largest pay packages in the ongoing AI talent war.
Is Google a Buy, Sell, or Hold?
Overall, on Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 28 Buys and nine Holds assigned in the past three months. The average GOOGL price target of $202.24 per share implies a 12.24% upside potential.
