Windsurf turned down $3 billion from OpenAI to take $2.4 billion from Google?

Something is off, and I haven’t seen it addressed yet.

I like history because it helps me understand human nature. Human nature doesn’t change. I value knowing the game you’re playing. Having a fleshed out understanding of human nature is a cheat code for understanding games that involve people.

With the Windsurf saga I don’t understand the game.

Some facts: OpenAI extended a $3 billion offer to purchase Windsurf. The stated sticking point was not wanting to share Windsurf IP with Microsoft. Who didn’t want to share the IP? According to Bloomberg Windsurf was the party that didn’t want Microsoft to have access to its IP. That puts Varun and maybe Douglas Chen in the driver’s seat for this stipulation.

OpenAI thought it had an agreement with Windsurf and almost announced the acquisition in early May, according to people familiar with the deal. There had been a signed letter of intent, and Windsurf investors were given what’s known as waterfall agreements, notifying each party how much money they were expected to make, the people said.

It seems like this arrangement would have seen Varun, Douglas Chen, and the entirety of the Windsurf team go to OpenAI.

Instead, Varun and Chen took only a team of researchers to Deepmind at a $600 million discount. That sticking point about sharing IP with Microsoft? Apparently not an issue anymore as big G received a non-exclusive license to use Windsurf’s IP.

Something doesn’t add up for me here. Founders and VCs leaving $600 million on the table while creating a confusing deal that paints the founders in a bad light?

As the smoke clears, I’ll be curious to see what really went down and then add that to my mental model about the game that’s being played in the wild wild west of the new AI world.