Windsurf AI Split After Failed OpenAI Deal; Google Steps In with $2.4B Talent Agreement
Brief news summary
Windsurf, an AI coding firm, nearly sold to OpenAI for $3 billion, but the deal collapsed at the last minute. Subsequently, Google offered $2.4 billion to hire Windsurf’s CEO and key employees and license its intellectual property, effectively splitting the company as remaining staff joined another AI startup, Cognition. This move drew criticism from industry leaders like Replit's CEO Amjad Masad, who argued it damages trust and morale within startup culture. Meanwhile, Meta invested $14.3 billion to acquire a 49% stake in Scale AI and recruited its CEO, Alexandr Wang. However, a Business Insider report highlighted dissatisfaction among Scale AI’s human data labelers, citing pay cuts, unpaid onboarding, and fewer work hours, contributing to high turnover. Despite these challenges, Scale AI’s spokesperson Joe Osborne maintains the company is financially robust and anticipates 2025 to be its most prosperous year, expecting greater profitability following the Meta partnership.Windsurf, an AI coding company, was close to being acquired by OpenAI for $3 billion, but the deal collapsed at the last moment. Google then appeared as a new interested party. Instead of a full acquisition, Google agreed to pay $2. 4 billion to hire Windsurf’s CEO and top talent, along with licensing the company's intellectual property. As a result, Windsurf was effectively split in two, with the remaining hundreds of employees moving to Cognition, another AI coding startup. “This breaks the Silicon Valley social contract, ” said Amjad Masad, CEO of Replit, a rival to Windsurf. “This is bad for startup employees.
They’ll be less inclined to join startups. What’s the point of working hard at a startup if you risk being exploited?” In June, Meta spent $14. 3 billion to purchase a 49% stake in Scale AI and recruited its CEO, Alexandr Wang. A recent Business Insider report revealed that the large workforce of human data labelers, who contributed to making Scale AI a powerhouse, are frustrated by pay cuts, long unpaid onboarding sessions for new AI projects, and decreasing workloads — leading many to quit. Joe Osborne, a spokesperson for Scale AI, insists that the company’s financials are solid. “This quarter is set to be our biggest of 2025, and our data business is more profitable now than it was before the Meta deal, ” Osborne told Business Insider.
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Windsurf AI Split After Failed OpenAI Deal; Google Steps In with $2.4B Talent Agreement
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