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In short: Top researchers and founders of AI coding startup Windsurf announced that they would join Google’s DeepMind Team, effectively ending OpenAI’s $3 billion bid for the company. Windsurf will continue to be independent, as Google won’t be taking a stake in the company and its new licensing agreement with it is non-exclusive.
According to Bloomberg, Google has agreed to pay $2.4 billion for the hire of Windsurf founders Varun Chen and Douglas Chen along with R&D staff. The Verge reports that the new hires are primarily going to help develop Google’s Gemini AI Platform.
Windsurf has announced that Jeff Wang will be the interim CEO. Jeff Wang is Windsurf’s Head of Business, who joined in 2023. Global Sales VP Graham Moreno is to be the president.
Windsurf, previously known as Codeium and founded in 2021, raised more than $200 million in venture capital. This money was raised from Greenoaks Capital Partners (formerly AIX Ventures), Greenoaks Capital Partners (formerly Greenoaks Capital Partners), and other investors. In a deal with General Catalyst, the AI coding platform was valued at $1.25billion. The two companies then attempted to value the platform at $3billion with Kleiner Perkins.
Windsurf had agreed to be acquired by OpenAI for that price earlier in the year, but it was reported that the deal collapsed due to concerns that Microsoft might gain Windsurf’s intellectual property. Microsoft’s partnership gives it access to ChatGPT’s technology. OpenAI could have competed with generative AI coding platform like Microsoft-owned GitHub if it had purchased Windsurf.
Google’s move is the latest example where a tech giant has poached top talent from a start-up without buying the company outright. Microsoft, Meta and other firms made similar deals recently, likely to avoid antitrust scrutiny. Also read: The rise in AI coding tools – Is English the new programming language?
The most disruptive area of generative AI is programming. Windsurf, for example, claims that large language models allow users to write code faster than ever before using natural language prompts.
Industry leaders, including Nvidia CEO Jensen Huang, and legendary programmer John Carmack have hailed AI for being a fundamental shift to software design. Microsoft CEO Satya Nadella admitted recently that AI now composes around 30% of Microsoft’s code. CTO Kevin Scott boasted, however, that 95% will be generated by AI by 2030.
Critics claim, however, that the technology is prone for error and remains inept to certain tasks. According to a recent paper by the AI research group METR although developers and experts claim that the technology speeds up the coding process between 10% and 50% it actually slows down programmers by about 19%.
