Google is in talks for a $1.5 billion-plus deal with AI coding agent startup Mechanize

Google is reportedly in talks to strike a more than $1.5 billion deal with AI coding startup Mechanize that could include hiring some of the startup’s talent and licensing its technology on a non-exclusive basis. The reported transaction would strengthen Google’s efforts to improve AI coding performance, an area where it has lagged some rivals. The story also highlights a broader Big Tech trend: using hybrid deals — combining talent acquisition with technology licensing — to gain AI capabilities while potentially reducing antitrust risk versus a full acquisition. Mechanize, founded last year, recently said it raised $9.1 million at a $500 million valuation, underscoring how quickly AI startups tied to coding tools and model evaluation are being valued. The potential deal is strategically important for Alphabet because better coding agents could improve Gemini’s competitiveness against OpenAI’s Codex and Anthropic’s Claude Code.