Google is in advanced talks to acquire talent and license technology from AI coding startup Mechanize in a deal valued at over $1.5 billion, people familiar with the matter said. The hybrid structure mirrors past deals with Windsurf and Character AI.
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Google is in advanced talks to acquire talent and license technology from AI coding startup Mechanize in a deal worth over $1.5 billion, four people familiar with the conversations said.
The negotiations, which have taken place over recent weeks, involve Google hiring some of Mechanize's staff and paying for a non-exclusive license to the startup's technology, one person familiar with the matter said. The talent Google would bring on would work on model evaluation and development, the person added.
The structure mirrors Google's recent workaround deals. In 2024, the company hired Windsurf's talent and licensed its technology after OpenAI tried to buy the startup. Windsurf’s CEO, Varun Mohan, now leads Google’s agentic coding platform Antigravity. That same year, Google rehired Character AI cofounder Noam Shazeer and paid for non-exclusive rights to that startup’s AI technology. (Shazeer left Google in recent weeks to join OpenAI.)
Companies sometimes use hybrid transactions to avoid the antitrust scrutiny that comes with full acquisitions. Google has used this approach several times over the past two years.
San Francisco-based Mechanize launched last year with a mission to automate every job. It raised $9.1 million in a funding round at a $500 million valuation, the startup said earlier this year. Its investors include former GitHub CEO Nat Friedman and Stripe CEO Patrick Collison. CEO Tamay Besiroglu previously cofounded Epoch AI, a research group that tests AI models.
Coding has become one of the most valuable applications of AI. Google has struggled to keep up with OpenAI’s Codex and Anthropic’s Claude Code, both of which have won over developer customers. Mechanize’s technology helps tech companies improve how their AI models perform on coding tasks.
Mechanize has broader ambitions beyond coding. “Our current focus is software engineering, but our long-term goal is the full automation of valuable work across the economy,” its website reads.
Google declined to comment over email. Mechanize declined to comment.
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