Google swoops on failed OpenAI deal

Good morning, AI enthusiasts. The AI coding startup that just about sold to OpenAI for $3B just landed at Google as a substitute, and the fallout reveals just how messy the OpenAI-Microsoft relationship has change into.

With the initial Windsurf agreement collapsing over Microsoft’s refusal to grant IP exceptions, Google seized an enormous opportunity to snag talent — and hand OpenAI one other setback in what has change into an increasingly frustrating summer.

In today’s AI rundown:

• Google swoops in as OpenAI, Windsurf deal collapses

• Moonshot AI’s K2 takes open-source crown

• Auto-switch between models for various tasks in n8n

• AI coding tools decelerate experienced devs

• 4 recent AI tools & 4 job opportunities

LATEST DEVELOPMENTS

OPENAI, GOOGLE, & WINDSURF

🏄‍♂️ Google swoops in as OpenAI, Windsurf deal collapses

The Rundown: Google is hiring Windsurf CEO Varun Mohan and several other researchers in a $2.4B licensing deal, coming within the wake of the coding startup’s $3B acquisition cope with OpenAI collapsing over complications in its partnership with Microsoft.

The small print:

• Mohan and co-founder Douglas Chen will join Google to work on agentic coding for Gemini, with Windsurf remaining independent under an interim CEO.

• The OpenAI agreement reportedly fell through over Windsurf’s concerns around Microsoft’s access to its tech through existing partnership agreements.

• The $3B deal had an exclusivity deadline that expired after Microsoft refused to provide OAI an exception that might allow Windsurf to avoid sharing its IP.

• The brand new agreement includes multi-year comp packages and a non-exclusive tech license, allowing Windsurf to proceed serving enterprise customers.

Why it matters: The Windsurf deal was set to be one among OpenAI’s biggest acquisitions thus far — now, it marks yet one more headache in what has been a rocky summer for the AI giant. The fallout stemming from Microsoft complications also adds fresh strain to an already frigid relationship between the previous AI power couple.

TOGETHER WITH SANA

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• Plan, create, and collaborate with agents and teammates — multi function place

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• Run multi-step workflows and handle complex tasks using your live business context

Drive enterprise-wide innovation today with Sana Agents.

MOONSHOT AI

🚀 Moonshot AI’s K2 takes open-source crown

The Rundown: Chinese startup Moonshot AI released Kimi-K2, an enormous 1T parameter open-weights model that matches or beats frontier-level models across a variety of benchmarks, with particular strength in coding and agentic tasks.

The small print:

• K2 surpasses models like GPT-4.1 and Claude 4 Opus on coding benchmarks, also scoring recent highs on math and STEM tests amongst non-reasoning systems.

• The model excels at agentic workflows, with examples showcasing complex multi-step tasks like analyzing data and booking travel with extensive tool use.

• Moonshot created a brand new tool called MuonClip that enabled stable training with zero crashes, potentially solving a serious cost bottleneck in development.

• K2 doesn’t have multimodal or reasoning capabilities yet, with Moonshot saying they plan so as to add those functionalities to Kimi in the long run.

Why it matters: Moonshot’s release doesn’t have the fanfare of the “DeepSeek moment” that shook the AI world, however it could be worthy of 1. K2’s benchmarks are extremely impressive for any model, let alone an open-weight one — and with its training advances, adding reasoning could eventually take Kimi to a different level.

AI TRAINING

🤖 Auto-switch between models for various tasks in n8n

The Rundown: On this tutorial, you’ll learn how one can use n8n’s recent model selector node to establish intelligent AI model routing that robotically selects the most effective model for every task at hand.

Step-by-step:

1. Create a brand new n8n workflow with “Chat Message” trigger and connect an “AI Agent”

2. Select “Model Selector” as a substitute of a single model and configure two options (e.g., ChatGPT o3 and Gemini 2.0 Flash)

3. Set routing rules so Model 1 triggers when the message comprises the keyword “code,” for instance, and Model 2 because the default for all the things else

4. Test with different messages: “Write a poem” routes to Gemini, “Python code example” routes to ChatGPT

Pro tip: Create specialized routing for various use cases, comparable to coding to ChatGPT, creative writing to Claude, research to Gemini, and easy inquiries to faster models for cost optimization.

PRESENTED BY SALESFORCE

🤝 The AI community turning ideas into motion

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On this conversation with Agentblazer Melissa Hill Dees, you’ll learn:

• How Agentblazers apply AI to unravel real problems

• Why Salesforce’s Trailhead and Data Cloud platforms provide a novel edge

• What’s driving enterprise AI adoption across sectors

Click here to learn more and watch the conversation.

METR

⚙️ AI coding tools decelerate experienced devs

The Rundown: AI research institute METR just published recent research findings that experienced developers take longer to finish real coding tasks when using AI assistants, despite reporting feeling more productive.

The small print:

• Researchers tracked 16 veteran open-source developers completing 246 actual tasks on massive codebases averaging 22k+ stars and 1M+ lines of code.

• The devs expected AI tools like Cursor Pro to save lots of them 24% of their time, but testing showed they took 19% longer when AI assistance was allowed.

• Time evaluation showed devs spending less time actively coding and more time prompting, reviewing generated code, and waiting for responses from AI tools.

• After completing the work, developers still believed AI had made them 20% faster despite the outcomes, showing a disconnect between perception and reality.

Why it matters: These results are a bit surprising given the growing percentage of code being written by AI at major firms. However the time factor could be the mistaken parameter to measure — teams should take a look at not whether AI makes developers faster, but whether it makes coding feel easier, even when it might take a bit longer.

QUICK HITS

🛠️ Trending AI Tools

• 🔬BioEmu – Microsoft’s open AI for predicting protein states and energies

• ⚙️ Devstral – Mistral’s SOTA open model family for agentic coding

• 🗣️ Speech in Flow – Bring images to life with speech in Google Flow

• 💬 Qwen Chat – Alibaba’s powerful AI models, now available via desktop app

💼 AI Job Opportunities

• ⚖️ Palantir Technologies – Legal Counsel

• 🔐 Descript – Infrastructure Security Engineer

• 📞 Parloa – Business Development Representative

• 🧑‍💻 Runway – Technical Customer Success Manager

📰 All the pieces else in AI today

OpenAI CEO Sam Altman announced that the corporate is pushing back the discharge of its open-weight model to permit for extra safety testing.

Tesla is incorporating xAI’s Grok assistant into its vehicles, with newly purchased cars coming with a built-in integration and support via software updates for older models.

xAI released a post detailing the technical issues that led to Grok-3’s offensive posts last week, linking them to the mistaken incorporation of “deprecated instructions.”

Meta acquired voice AI startup PlayAI, with your entire team reportedly joining the corporate next week and reporting to former Sesame AI ML Lead Johan Schalkwyk.

Microsoft released Phi-4-mini-flash-reasoning, a 4B open model designed to run efficient advanced reasoning capabilities for on-device use cases.

X users uncovered that Grok 4 consults Elon Musk’s posts during its considering process, with xAI pushing a system update to stop basing its answers on its creator’s remarks.

COMMUNITY

🎥 Watch our last live workshop

Try our last live workshop with Dr. Alvaro Cintas, The Rundown’s AI professor. By the tip of the workshop, you’ll confidently have the option to put in and use Gemini CLI to spice up your productivity right from the command line.

Watch it here. Not a member? Join The Rundown University on a 14-day free trial.

See you soon,

Rowan, Joey, Zach, Alvaro, and Jason—The Rundown’s editorial team