Google is in advanced talks to pay over $1.5 billion for Mechanize's technology and talent, following a similar $2.4 billion licensing deal with Windsurf in July.
Google is in discussions to spend over $1.5 billion on a deal with artificial intelligence coding startup Mechanize, Business Insider reported Wednesday, citing unnamed people familiar with the matter. The agreement would involve hiring some of Mechanize's engineers and signing a non-exclusive license for the company's technology, the report said.
The talks are ongoing and the terms could change, the report added. Neither Google nor Mechanize immediately replied to requests for comment.
The potential deal follows a similar structure Google used in July to secure technology from AI coding startup Windsurf. That arrangement involved $2.4 billion in licensing fees rather than an outright acquisition, Business Insider reported at the time.
Mechanize launched in April 2025 with $9.1 million in seed funding at a $500 million post-money valuation, the company said in a press release. The startup builds simulated work environments and evaluation tools for coding agents – the AI models that write, test and debug software. Its stated goal is "the full automation of the economy." The company has not disclosed headcount or revenue.
AI coding assistants have become a fast-growing segment of the technology market. They let smaller engineering teams complete tasks that would otherwise require more developers, and they shorten the time companies need to bring products to market, PYMNTS reported in June. OpenAI's Codex agent and enterprise offerings have emerged as a growth engine for the Microsoft-backed firm, according to a May report.
Google has been building its AI coding capabilities through licensing arrangements. The Windsurf deal in July brought in top executives and researchers, who joined Google's AI teams. The Mechanize talks suggest the company is continuing that strategy of accessing external technology without a full acquisition.
The coding agent market is still young but growing quickly. Mechanize's focus on creating environments where agents can learn and be scored could complement Google's model training pipeline. The deal would give Google access to technology that enables AI models to handle complex software engineering tasks that involve long sequences of steps, coordinating with other tools, and adapting to interruptions.
Mechanize's valuation in the reported talks is three times the figure from its April funding round. Investors have shown strong demand for AI coding startups. The company did not respond to a request for comment.
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