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The Rundown: Google is hiring Windsurf CEO Varun Mohan and several researchers in a $2.4B licensing deal, coming in the wake of the coding startup’s $3B acquisition deal with OpenAI collapsing over complications in its partnership with Microsoft.

The details:

• Mohan and co-founder Douglas Chen will join Google to work on agentic coding for Gemini, with Windsurf remaining independent under an interim CEO.
• The OpenAI agreement reportedly fell through over Windsurf’s concerns around Microsoft’s access to its tech through existing partnership agreements.
• The $3B deal had an exclusivity deadline that expired after Microsoft refused to give OAI an exception that would allow Windsurf to avoid sharing its IP.
• The new agreement includes multi-year comp packages and a non-exclusive tech license, allowing Windsurf to continue serving enterprise customers.

Why it matters: The Windsurf deal was set to be one of OpenAI’s biggest acquisitions to date — now, it marks yet another headache in what has been a rocky summer for the AI giant. The fallout stemming from Microsoft complications also adds fresh strain to an already frigid relationship between the former AI power couple.