How Microsoft’s Move Sabotaged OpenAI’s $3 Billion WindSurf Acquisition and Gave Google the Upper Hand

OpenAI’s $3 billion acquisition of AI coding startup WindSurf has fallen through, following the lapse of the exclusivity period on their offer. Initially, the deal was close to fruition, with a signed letter of intent and agreements in place. However, OpenAI’s spokesperson confirmed that WindSurf is now exploring other opportunities. In a strategic move, Google has stepped in, securing a deal worth approximately $2.4 billion to acquire WindSurf’s CEO Varun Mohan, co-founder Douglas Chen, and select talent for its DeepMind unit. This acquisition enhances Google’s competitive edge in the AI landscape. Tensions with Microsoft, a major OpenAI investor, reportedly contributed to the deal’s collapse, as WindSurf hesitated to grant Microsoft access to its intellectual property, despite OpenAI’s existing agreements. Founded in 2021, WindSurf specializes in AI-driven coding assistants and has raised over $200 million in venture capital.

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