“Google has agreed to pay about $2.4 billion in a deal to license the technology of AI coding startup Windsurf and also hire its CEO and some of its employees, according to people familiar with the matter.
The deal comes after acquisition talks for OpenAI to acquire Windsurf stalled, the people said.
Google is hiring a small number of Windsurf's employees to focus on agentic coding within its DeepMind division and the tech giant will also acquire a nonexclusive license to some of Windsurf's technology.
Google isn't taking a stake in Windsurf. Most of Windsurf's existing employees will remain at the company.
OpenAI first struck an agreement to buy the startup for $3 billion in April in an effort to boost the growth of its AI coding products.
But the deal hit a roadblock after Microsoft, OpenAI's largest investor, objected to some of the terms, The Wall Street Journal reported.
OpenAI didn't want to give Microsoft access to Windsurf's technology. Under their current contract, the tech giant is entitled to all of the startup's intellectual property.
The failed talks are a setback for OpenAI, which is racing against other tech companies to build AI coding assistants, one of the largest new markets enabled by generative AI, and shows how tensions with its largest partner are hampering major business efforts.
It is also another example of the pitched battle going on between Silicon Valley giants to hire and retain the most talented AI scientists and engineers.
Tech giants have pursued similar "acquihire" deals as a way to attract top startup talent while avoiding the scrutiny of antitrust regulators. Google last year paid $2.7 billion to hire its former researcher Noam Shazeer and license technology from the startup he started, Character.AI.
Microsoft and Amazon have also struck similar deals with startups.
Google negotiated its deal with Windsurf after the exclusivity window for talks between OpenAI and Microsoft fell through. Tech news site The Verge earlier reported on some aspects of Google's deal.” [1]
Which is better, Windsurf or Cursor?
Both Cursor and Windsurf are AI-powered code editors, but they cater to different needs.
Cursor is generally preferred for smaller projects, faster prototyping, and individual developers due to its speed and strong VS Code integration.
Windsurf excels in large, multi-file projects, offering better team collaboration, cross-IDE support, and deep codebase understanding.
Here's a more detailed breakdown:
Cursor:
Strengths: Fast, great for local context, good for solo developers, strong VS Code integration, features like "Composer" for multi-file workflows, rollback feature.
Weaknesses: May not be as strong in large, complex projects, may struggle with context loss.
Good for: Individuals, small projects, rapid prototyping.
Windsurf:
Strengths: Excellent for large projects, deep multi-file understanding, good for team collaboration, cross-IDE support, strong enterprise features.
Weaknesses: May not be as fast or intuitive for smaller projects, can be overkill for simple tasks.
Good for: Large codebases, teams, enterprise environments.
In essence, if you're a solo developer working on a smaller project, Cursor might be a better fit. If you're working on a large project, collaborating with a team, or need strong enterprise features, Windsurf is the recommended choice.
Is Windsurf AI free?
Yes, Windsurf AI has a free plan. It includes a limited number of prompt credits and access to premium models with a two-week trial of Pro features. The free plan also provides unlimited Fast Tab and SWE-1 Lite, but access to more advanced features like Cascade and premium models (e.g., GPT-4.1, Claude 3.5 Sonnet) may be limited or require using credits.
Here's a more detailed breakdown:
Free Plan:
Price: $0/month.
Features:
25 prompt credits per month (equivalent to 100 GPT-4.1 prompts, as each credit allows for 4 prompts).
Access to all premium models (though potentially with limitations).
Unlimited Fast Tab and SWE-1 Lite.
Optional zero data retention.
2-week trial of Pro features.
Limitations:
Limited number of prompt credits.
Potential limitations on access to premium models or features like Cascade (e.g., read-only mode).
May require paying for additional credits beyond the initial 25.
Paid Plans (Pro, Teams, Enterprise):
Benefits: More prompt credits, faster access to premium models, additional features like app deploys, and more.
Cost: Pro starts at $15/month, Teams starts at $30/user/month, and Enterprise starts at $60/user/month.
Essentially, Windsurf offers a free tier to allow users to explore and test its AI capabilities, with a focus on providing a taste of the premium experience through the free trial and limited credits. For more extensive or professional use, paid plans are available.
1. EXCHANGE --- Google Strikes Deal With AI Coding Startup Windsurf. Berber, Jin; Blunt, Katherine. Wall Street Journal, Eastern edition; New York, N.Y.. 12 July 2025: B9.
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