AI startup Windsurf is officially off the market—but not to OpenAI. Instead, Cognition has stepped in with a deal to acquire the company after OpenAI’s $3 billion bid fell apart. And in a surprising twist, Windsurf’s top leadership—including CEO Varun Mohan—has jumped ship to Google.
Cognition is taking over everything: Windsurf’s intellectual property, products, branding, and business operations. As part of the deal, all Windsurf employees will share in the financial upside; no waiting around for equity to vest—Cognition has waived cliffs and fast-tracked rewards for work already done.
So, what went wrong with OpenAI? According to sources, the deal collapsed over concerns tied to Microsoft (MSFT, Financials), OpenAI’s close partner. There were worries that Windsurf’s tools might overlap with Microsoft’s Copilot product—too much, too soon. That gave Google (GOOGL, Financials) an opening. In a separate $2.4 billion hiring deal, the tech giant brought over key Windsurf talent, including Mohan, co-founder Douglas Chen, and several top engineers. They’ve all landed at DeepMind, where they’ll help drive Google’s AI agent push, particularly through its Gemini platform.
Cognition, meanwhile, is integrating Windsurf’s development tools directly into its flagship AI coder, Devin. The vision? A smarter, more autonomous IDE where developers can map out projects, delegate tasks to multiple Devins, and see it all come together in one place—with diagrams, checklists, and code suggestions woven into the workflow.
Both companies were already aligned in their mission to reinvent how software gets written; this deal just fast-tracks that future. AI won’t just help you write code—it might soon help run the entire show.
