Google Reportedly Discusses a $1.5B-Plus Mechanize Talent and Technology Licensing Deal

August 6, ITHome reports that Google wants its artificial intelligence to perform better at coding, and the company may have found a shortcut. According to Business Insider, four people familiar with the matter said the tech giant has been in talks with San Francisco startup Mechanize in recent weeks over a potential deal that would include Google hiring some of Mechanize’s talent.

Some of the sources said the deal could be worth more than $1.5 billion (ITHome note: approximately RMB 10.143 billion at current exchange rates). Negotiations are still ongoing, and the specific details could change. Another source said that, as part of the deal, Google is discussing a non-exclusive technology licensing agreement with Mechanize. The Mechanize employees who may join Google would work on model evaluation and development.

The talks highlight two realities behind the AI boom: coding has become one of AI’s most important and commercially valuable applications, while major technology companies are exploring more flexible ways to acquire the talent and technology they need to remain competitive.

This would not be the first time Google has used a deal structure that bypasses a traditional acquisition to secure talent and technology. In recent years, Google has structured some acquisitions as hybrid transactions, bringing in teams through “acqui-hires” while obtaining the related technology through licensing agreements and other arrangements. Companies sometimes use this approach to avoid the antitrust scrutiny that a full acquisition might attract.

Last year, after OpenAI attempted to acquire Windsurf, Google moved quickly to bring in the company’s core talent and license its technology. Windsurf CEO Varun Mohan now leads Google’s Antigravity intelligent coding platform. In 2024, Google also rehired Character AI co-founder Noam Shazeer and paid for non-exclusive rights to use the startup’s AI technology. (Shazeer recently left Google to join OpenAI.)

Mechanize was founded last year with the goal of automating all work. The company has attracted several prominent investors, including former GitHub CEO Nat Friedman, Patrick Collison, and podcast host Dwarkesh Patel.

Earlier this year, Mechanize said it had completed a $9.1 million funding round (approximately RMB 61.536 million at current exchange rates), valuing the company at $500 million (approximately RMB 3.381 billion at current exchange rates). Mechanize CEO Tamay Besiroglu previously co-founded Epoch AI, an organization that also focuses on testing artificial intelligence models.

Mechanize’s technology could help technology companies improve their AI models’ performance on coding tasks, an area in which Google is currently under pressure. Meanwhile, OpenAI and Anthropic have already attracted large numbers of developers with products such as Codex and Claude Code.

However, Mechanize’s ambitions are not limited to coding. The company states on its website: “We are currently focused on software engineering, but our long-term goal is to fully automate all economically valuable work across the entire economy.”