Google Acquires Mechanize's Team for Over $1.5 Billion to Catch Up in AI Coding

Google closed a deal worth more than $1.5 billion this month with the small AI startup Mechanize, hiring away a dozen-plus members of its team and licensing its technology for training coding agents on a non-exclusive basis. According to a Business Insider report cited by other tech outlets, the deal was not structured as a traditional acquisition, which allowed it to avoid a mandatory filing with US antitrust regulators.

Mechanize, founded in April 2025 by former Epoch AI researchers Tamay Besiroglu, Matthew Barnett and Ege Erdil, built virtual environments, benchmarks and training data designed to teach AI agents to handle increasingly complex software engineering tasks. The company had raised just $9.1 million in seed funding at a $500 million valuation, with investors including former GitHub CEO Nat Friedman and Stripe CEO Patrick Collison.

How the Deal Was Structured

Rather than formally acquiring the company, Google hired away part of Mechanize's staff and licensed its technology on a non-exclusive basis. That structure does not require a filing under the Hart-Scott-Rodino review, which is mandatory for full mergers and acquisitions in the United States, allowing Google to sidestep scrutiny from antitrust officials who have spent the past two years watching exactly this kind of consolidation in the AI market.

Mechanize itself still exists as an independent company, but under new leadership. According to LinkedIn profiles cited by Business Insider, co-founder and former CEO Tamay Besiroglu now works as a research scientist at Google DeepMind, while former chief of staff Guive Assadi has taken over as head of Mechanize.

A Repeat of the Windsurf Playbook

This isn't the first time Google has made this kind of move. In July 2025, the company paid roughly $2.4 billion to license technology from the startup Windsurf, bringing its CEO Varun Mohan, co-founder Douglas Chen and part of its research team into DeepMind. Mohan now leads Google's agentic coding program, called Antigravity. Google previously applied a similar structure to the startup Character.AI as well.

The buzz around the Mechanize deal fits into a broader trend of poaching AI talent instead of acquiring entire companies. Other companies in the industry use similar mechanisms, licensing technology and hiring key people rather than buying the company outright, when they want to avoid lengthy and uncertain antitrust proceedings.

Why Coding Is a Google Priority

More than a dozen former Mechanize employees have joined Google, most of them on the team working on so-called midtraining, a model-training stage that's key to building a competitive chatbot. The company has spent months fending off the perception that its coding tools lag behind the competition, as Anthropic's Claude Code and OpenAI's Codex have won over a large share of developers while Google has only recently started catching up with its own Gemini 3.5 Flash and Antigravity tools.

The financial terms of the final agreement were not disclosed. Google and Besiroglu declined to comment on the closed deal when asked by Business Insider.

For Poland's IT market, the situation signals where competition among the biggest AI-powered developer tool providers is headed. More and more Polish software companies use Claude Code, Codex or Gemini on a daily basis, and the race among tech giants to build better coding models directly affects how fast these tools improve and what they cost to access.

The deal's history goes back to early August, when the first reports of talks between Google and Mechanize surfaced in the media. Within a month, the negotiations turned into a closed transaction, as reflected in changes to the professional profiles of key people from Mechanize.