AI startup Cognition AI Inc. has agreed to acquire the remaining assets of Windsurf for an undisclosed amount. This follows a recent $2.4 billion deal between Alphabet's Google (GOOGL, Financial) and Windsurf to acquire its top talent and licensing rights. Windsurf's interim CEO, Jeff Wang, expressed confidence in Cognition as the ideal team to lead Windsurf into its next phase.
The acquisition concludes a turbulent period for Windsurf, which previously planned a $3 billion sale to OpenAI that fell through due to tensions with OpenAI's major investor, Microsoft. Last week, Google announced the hiring of Windsurf’s CEO Varun Mohan and co-founder Douglas Chen, along with a few employees, for its DeepMind AI division.
This move highlights tech giants' strategy of acquiring talent and technology from promising AI startups without full company acquisitions, potentially avoiding antitrust scrutiny. Cognition's deal includes Windsurf's intellectual property, remaining staff, cash, assets, and brand. Cognition CEO Scott Wu reported Windsurf's $82 million annual recurring revenue and rapid enterprise growth, ensuring all employees benefit financially from the deal.
Cognition recently secured funding at a $4 billion valuation, led by 8VC and supported by investors like Founders Fund and Khosla Ventures. The company promotes its AI coding tool, Devin, as the "world's first AI software engineer."
