Cognition Acquires AI Startup Windsurf Post-CEO Departure for $2.4 Billion; Google’s Poaching Sparks Speculation

In an announcement made on Monday, artificial intelligence startup Cognition has revealed its intention to acquire Windsurf, the AI coding company that recently experienced significant executive departures to Google. The acquisition encompasses Windsurf’s intellectual property, products, trademarks, brand, and talent, although the specific terms of the deal have not been disclosed.

This development represents another strategic move in the intensifying competition among tech giants such as Meta, Google, and OpenAI for top engineering and research talent. Initially, OpenAI had negotiated a potential acquisition of Windsurf for approximately $3 billion in April; however, this deal ultimately collapsed. Subsequently, Google announced its hiring of Windsurf’s co-founder and CEO, Varun Mohan, with reports suggesting that Google will pay approximately $2.4 billion in licensing fees and compensation.

In a memo addressed to employees on Monday, Cognition’s CEO, Scott Wu, assured that every new employee at Cognition would be treated equitably, with transparency, fairness, and deep respect for their abilities and value. He emphasized the unity of the combined teams, stating, “There’s only one boat and we’re all in it together.”

Neither Windsurf nor Cognition responded immediately to CNBC’s request for comment.

Cognition has garnered attention for its AI coding agent, Devin, designed to facilitate faster software development. As of March, the startup had secured hundreds of millions of dollars in funding at a valuation close to $4 billion, according to Bloomberg’s report.

Both companies share investment from Peter Thiel’s Founders Fund. Other investors in Windsurf include Greenoaks, Kleiner Perkins, and General Catalyst.

In the same memo, Wu assured that all Windsurf employees would be treated with respect and well-taken care of during the transaction. The memo outlined that all employees would financially benefit from the deal, have vesting cliffs waived for their previous work, and receive fully accelerated vesting for their future contributions.

Wu concluded by expressing his excitement for the opportunities ahead: “There’s never been a more exciting time to build.”