(Reuters) -Alphabet's Google has hired several key staff members from AI code generation startup Windsurf, a Google spokesperson said on Friday, in a surprise move following an attempt by its rival OpenAI to acquire the startup.

Windsurf CEO Varun Mohan, co-founder Douglas Chen, and select members of the coding tool's research and development team will join Google's DeepMind artificial intelligence division, the Google spokesperson said.

The former Windsurf team will focus on agentic coding initiatives at Google DeepMind, primarily working on the Gemini project.

ChatGPT maker OpenAI was in talks to buy Windsurf, one of the hottest startups disrupting software development, sources familiar with the matter told Reuters in June.

OpenAI could not immediately be reached for a comment.

"We're excited to welcome some top AI coding talent from Windsurf's team to Google DeepMind to advance our work in agentic coding," the Google spokesperson said.

As part of the deal, the search engine giant is entering a non-exclusive license for certain Windsurf technology, according to a source familiar with the matter. Google will not take a stake in Windsurf, the person said.

Windsurf investors will receive liquidity as part of the deal, sources told Reuters.

Google's surprise swoop mirrors a deal in August 2024 to hire key employees from chatbot startup Character.AI.

Big Tech peers, including Microsoft, Amazon and Meta, have similarly taken to these so-called acquihire deals, which some have criticized as an attempt to evade regulatory scrutiny.

Microsoft struck a $650 million deal with Inflection AI in March 2024, to use the AI startup's models and hire its staff, while Amazon hired AI firm Adept's co-founders and some of its team last June.

Meta took a 49% stake in Scale AI in June in the biggest test yet of this increasing form of business partnerships.

Unlike acquisitions that would give the buyer a controlling stake, these deals do not require a review by U.S. antitrust regulators. However, they could probe the deal if they believe it was structured to avoid those requirements or harm competition.

Many of the deals have since become the subject of regulatory probes.

The development comes as tech giants, including Alphabet and Meta, aggressively chase high-profile acquisitions and offer multi-million-dollar pay packages to attract top talent in the race to lead the next wave of AI.

Windsurf's head of business, Jeff Wang, has been appointed its interim CEO, and Graham Moreno, vice president of global sales, will be president, effective immediately.

The majority of Windsurf's roughly 250 employees will remain with the company, which has announced plans to prioritize innovation for its enterprise clients.

(Reporting by Kenrick Cai in San Francisco, Krystal Hu in New York, and Kritika Lamba in Bengaluru; Editing by Shailesh Kuber and Muralikumar Anantharaman)