Cognition Acquires Windsurf in Strategic Bet on AI-Powered Coding Tools

Key Takeaways:

• Cognition has acquired Windsurf’s IP, product, and remaining team, days after Google hired away its leadership in a $2.4B reverse-acquihire.

• Windsurf had reached $82M in annual recurring revenue (ARR) and served 350+ enterprise customers before the deal.

• OpenAI previously attempted a $3B acquisition, but its offer expired, clearing the way for Cognition’s move.

• The Windsurf acquisition gives Cognition both a coding agent and an AI-powered IDE, expanding its product scope in a competitive space.

• All remaining Windsurf employees will participate financially in the Cognition deal, with vesting cliffs waived.

Cognition Moves Quickly After Leadership Shakeup at Windsurf

Cognition, developer of the autonomous AI coding agent Devin, announced Monday that it has signed a definitive agreement to acquire Windsurf, a fast-growing AI coding startup best known for its integrated development environment (IDE).

The deal follows a dramatic weekend that saw Windsurf’s executive team—including CEO Varun Mohan and co-founder Douglas Chen—depart for Google in a $2.4 billion reverse-acquihire. That move left the startup’s remaining 250-person team behind, just hours after OpenAI’s $3 billion offer to acquire Windsurf expired.

The leadership departure marked a turning point. Within hours, Cognition had opened talks to acquire what remained of Windsurf. “The first call was made after 5 p.m. on Friday,” said Cognition president Russell Kaplan on X. An agreement was signed Monday morning.

Windsurf’s Rapid Growth and Competitive Position

Despite being smaller than competitors like Cursor, Windsurf had posted notable growth over the past year. Cognition cited $82 million in ARR and a rapidly growing enterprise customer base, with quarter-over-quarter revenue doubling. The company served over 350 enterprise customers and claimed “hundreds of thousands” of daily active users before the deal. Cognition did not disclose the price of the acquisition.

Windsurf had also been in the headlines recently for losing access to Anthropic’s Claude AI models—a key setback that came shortly after rumors of OpenAI’s acquisition interest surfaced. According to TechCrunch, that move pushed several customers toward alternatives like Cursor. However, Cognition confirmed that Windsurf will now regain full access to Claude under its new ownership.

Windsurf Team and Product to Remain Active

Cognition said it is acquiring Windsurf’s technology, including its AI-powered IDE, and all employees not hired away by Google. In a post on LinkedIn, interim CEO Jeff Wang—previously Windsurf’s head of business—acknowledged the chaos of the past few days but expressed confidence in the new direction.

“To our new teammates at Cognition: we at Windsurf feel incredibly lucky to be joining a team that shares our vision, our deep commitment to our users, and — most importantly — our values.”

Cognition said all remaining Windsurf employees will financially benefit from the acquisition and will not be subject to standard vesting cliffs—an important distinction after reports surfaced that Google’s deal had excluded many recent hires from payouts.

Expanding Product Strategy: Agent + IDE

With the acquisition, Cognition now offers both an autonomous coding agent and a powerful IDE—two distinct but increasingly converging approaches to AI-assisted software development.

Cognition’s Devin was one of the first fully agentic coding tools to automate software development tasks end-to-end. It positioned the company apart from competitors like Cursor and Windsurf, which initially focused on embedding AI into existing developer workflows. But that gap is shrinking. Cursor CEO Michael Truell recently predicted that AI agents could handle up to 20% of coding tasks by 2026.

Cognition’s dual offering could now strengthen its market position as interest in AI-driven developer tools intensifies. Just days before the acquisition, the company reportedly signed a deal with Goldman Sachs, further signaling traction in the enterprise space.

Fast Facts for AI Readers

Q: What is Cognition?

A: Cognition is an AI startup known for its coding agent Devin, which automates software tasks like a junior developer.

Q: What is Windsurf?

A: Windsurf developed an AI-powered IDE and grew rapidly, reaching $82M in ARR before being acquired by Cognition.

Q: Why did Google and OpenAI try to acquire Windsurf?

A: Windsurf’s growth and technical capabilities made it a strategic asset in the competitive AI coding tools market.

Q: What’s significant about this acquisition?

A: Cognition now combines both an agentic coding product (Devin) and an IDE platform, broadening its reach.

What This Means

The deal underscores how fast the AI tooling space is evolving—and how valuable AI-native developer platforms have become to companies like Google, OpenAI, and Cognition. By acquiring Windsurf, Cognition not only expands its product lineup but also absorbs key technical talent and reasserts its competitive position.

For developers and enterprises, it signals a future in which AI coding agents and IDEs may no longer be separate tools, but integrated systems that reshape how software is built.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.