Artificial intelligence firm Cognition AI has formally bought Windsurf AI, a competing AI coding startup, only days after Windsurf lost its chief executive and some top talent to Google. The Cognition Windsurf acquisition, announced Monday, comprises Windsurf’s intellectual property, product assets, brand, trademark, and remaining talent, but the terms of the financial deal were not made public.
This move is made at a time when there is increased competition in the AI sector, with industry giants such as Meta, Google, and OpenAI aggressively competing for high-quality AI talent and technologies, intensifying the AI talent war. This reflects the ongoing AI talent hiring competition across the board.
Windsurf’s Chief Executive Joins Google, OpenAI Acquisition Falls Through
The deal comes on the heels of a period of high-level uncertainty at Windsurf. In April, OpenAI was said to be in talks to buy Windsurf as part of a $3 billion deal, but negotiations later broke down, referred to in media as the OpenAI Windsurf deal.
Recently, Google intervened and poached Windsurf co-founder and CEO Varun Mohan Google. Google is paying about $2.4 billion in licensing fees and severance tied to the hire, according to CNBC. The impact of Windsurf CEO joining Google on OpenAI deal remains a hot topic among tech observers.
Cognition’s Message to New Teammates
Cognition AI CEO Scott Wu emphasized unity and fairness in a memo sent to employees on Monday. “Every new employee of Cognition will be treated the same way as existing employees: with transparency, fairness, and deep respect for their abilities and value,” Wu stated.
He stressed that the combined teams would now operate as “a united and aligned team,” adding, “There’s only one boat and we’re all in it together.” This statement reinforces the company’s employee-first acquisitions approach and showcases how Cognition plans to integrate Windsurf’s IP and team.
When contacted for comment, Cognition refused to comment, and Windsurf pointed questions back to Cognition.
About Cognition and Windsurf
Cognition AI is perhaps most known for Devin AI, its AI coding tool created to help engineers write software. As of March this year, the startup had already raised several hundred million dollars, reports Bloomberg, and was worth almost $4 billion. Future of AI coding agents like Devin is one of the key interests shaping the current tech landscape.
Surprisingly, both Windsurf and Cognition have Founders Fund AI backing, with Founders Fund being co-founded by Peter Thiel AI investments. Greenoaks, Kleiner Perkins, and General Catalyst are among the other prominent investors in Windsurf, making this a noteworthy AI startup acquisition in the eyes of analysts tracking AI company merger trends.
Employee-Centric Terms and Appreciation
Jeff Wang Windsurf, who became Windsurf’s interim CEO, was hopeful and proud after the acquisition. In a tweet on X (formerly Twitter), he stated, “Trying times reveal character, and I couldn’t be prouder of how every single person at Windsurf showed up these last three days for each other and for our users.” These statements shed light on the company’s culture during AI industry consolidation.
Cognition’s growth strategy in AI coding space became more evident when the internal memo uncovered employee-friendly acquisition terms in AI industry. All of Windsurf’s employees will have financial stake in the transaction, immediate vesting for work already done, and vesting cliffs waived. Wu stressed the respect for employees and making sure they are “well taken care of.”
Looking Ahead
“Never has there been a more thrilling moment to construct,” Wu summed up in his memo, indicating Cognition’s sustained dedication to innovation in the rapidly evolving AI coding sector. The inside the Cognition and Windsurf acquisition story illustrates broader trends in AI mergers and acquisitions and helps answer the question: Why Cognition acquired Windsurf after CEO exit.
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