AI programming field is changing drastically! OpenAI has been outbid by Alphabet Inc. Class C (GOOGL.US) for 2.4 billion dollars, acquiring Windsurf's core assets and talent.

According to informed sources, after the acquisition agreement between the startup focusing on AI programming, Windsurf, and the AI unicorn OpenAI unexpectedly fell through, Alphabet's technology giant Alphabet Inc. Class C (GOOGL.US) has reached a major alternative acquisition agreement with Windsurf, acquiring Windsurf's top talent team and core technology license for approximately $2.4 billion. Alphabet Inc. Class C released a statement on Friday, stating that they will hire Windsurf CEO Varun Mohan, co-founder Douglas Chen, and a small number of core technical employees to join Alphabet Inc. Class C's DeepMind artificial intelligence business department. Alphabet Inc. Class C declined to comment on financial terms, only stating that the deal does not include a full stake in the AI startup Windsurf. Sources said that Windsurf had previously agreed to be acquired by OpenAI for approximately $3 billion, but the deal, which would have shaken up the AI programming field, ultimately collapsed due to increasingly strained relations with Microsoft Corporation, OpenAI's main investor. OpenAI unexpectedly failed to acquire Windsurf Sources said that the Windsurf management team did not want Microsoft Corporation to access its intellectual property, and OpenAI could not convince Microsoft Corporation to allow this. According to the existing agreement between Microsoft Corporation and OpenAI, Microsoft Corporation has the right to obtain core technology licenses related to AI programming from the startup. OpenAI thought they had successfully acquired Windsurf and almost announced a successful acquisition in early May. At that time, both parties had signed an agreement, and Windsurf's investors also received notifications about profit distribution - estimating how much money they would make. An OpenAI spokesperson did not directly confirm the collapse of the acquisition on Friday but emphasized that the exclusivity period of their acquisition offer had expired, allowing Windsurf to consider other offers freely. Microsoft Corporation and Windsurf both declined to comment. Windsurf, a startup focused on AI programming tools, formerly known as Codeium, is an AI startup based in Mountain View, California, focusing on developing next-generation AI programming tools and AI intelligent body integration development environments. The core AI programming product under Windsurf is its independently developed AI programming platform ecosystem, aimed at providing support for developers through the following AI functions: Cascade is an intelligent agent that can understand the developer's intent, automatically generate, modify code, and run and debug programs when necessary; Supercomplete goes beyond traditional autocomplete features, providing context-aware and precise predictive code suggestions to improve code writing efficiency; Memories function is responsible for recording the user's coding habits and project characteristics, with context-aware auto-save function, providing personalized suggestions and automated precise operations; Windsurf Tab tracks the user's command history and clipboard content, providing smarter, more relevant suggestions. Windsurf also offers integration with a variety of mainstream software tools and SaaS software subscription services, such as GitHub, Figma, Slack, Stripe, etc., aiming to provide developers with an all-in-one development experience. Meanwhile, OpenAI is accelerating the updates and iterations of its leading AI large models and generative AI application software. Windsurf currently leads in the field of AI programming, especially in providing an "agent-based" AI programming experience. OpenAI had hoped to solidify its dominant position in the AI programming field after the acquisition, leveraging its powerful generative AI ecosystem and deep integration with OpenAI's Codex CLI programming intelligent body, positioning itself as a leader in the AI programming market and driving global AI programming development. Absorbing core patents and talent, rather than the entire startup In recent years, large tech companies have frequently absorbed the executive teams and core technology of potentially promising AI startups through "quasi-acquisitions," avoiding direct acquisitions, with some commentators suggesting it is to evade increasingly stringent antitrust scrutiny. Last year, Microsoft Corporation hired the founder and most employees of Inflection AI, obtaining the company's core AI software license; Amazon.com, Inc. poached executives and top technical teams from the startup Adept AI Labs and signed licensing agreements; Alphabet Inc. Class C had previously recruited the two co-founders of Character.AI in a similar manner. However, U.S. antitrust regulators have begun investigating some talent and core asset transactions. Last month, Meta Platforms, the parent company of Facebook, acquired approximately 49% of the equity of Scale AI, a data labeling AI startup, for over $14 billion, and hired its co-founder Alexandr Wang to join Meta's "Super Intelligence" team. Subsequently, Meta led by Zuckerberg poached top AI talents in the field from Alphabet Inc. Class C, OpenAI, Apple Inc., and other tech companies. It is said that Meta has offered over $200 million in annual salary to a former distinguished AI engineer from Apple Inc. Established in 2021, Windsurf is committed to creating a super AI assistant focusing on AI programming, allowing for tasks such as code writing and participating in large software projects through natural language prompts. According to PitchBook data, Windsurf has raised over $200 million in venture capital, with other investors primarily including Greenoaks Capital Partners and AIX Ventures. Judson Althoff, Chief Commercial Officer of Microsoft Corporation, stated this week that AI programming applications at Microsoft Corporation account for as much as 35% of the programming workload for new products, significantly accelerating time to market for products. Microsoft Corporation executives said at an earnings conference that their GitHub Copilot AI application product is one of the leaders in the AI coding tools market, with approximately 15 million users (data as of April).