Google is reportedly in talks for a deal worth more than $1.5 billion with AI startup Mechanize, a company focused on training AI coding agents.
According to people familiar with the discussions, the proposed agreement would involve Google hiring part of Mechanize’s team while securing a non-exclusive license to its technology, rather than acquiring the company outright. The deal is still under negotiation and could change.
The engineers joining Google would reportedly work on AI model development and evaluation as the company strengthens its position in the rapidly growing market for AI coding assistants.
The talks reflect the increasing importance of coding agents, one of the fastest-growing applications of generative AI. Rivals including OpenAI and Anthropic have gained traction with Codex and Claude Code, putting pressure on competitors to improve their own developer tools.
Google has used similar deal structures before. Instead of full acquisitions, it has hired startup talent while licensing technology, an approach that can reduce antitrust concerns. Last year, Google hired key members of Windsurf after OpenAI attempted to acquire the company, and in 2024 it brought back Character.AI co-founder Noam Shazeer while licensing Character.AI’s technology.
Mechanize was founded in 2025 with the goal of automating software engineering and, eventually, broader knowledge work. The startup previously raised $9.1 million at a $500 million valuation and is backed by investors including former GitHub CEO Nat Friedman, Stripe CEO Patrick Collison, and podcaster Dwarkesh Patel.
Neither Google nor Mechanize commented on the reported negotiations.