Cognition, the Creator of AI Coding Agent Devin, Acquires Windsurf
Cognition, the firm behind the popular AI coding assistant Devin, announced in a blog post on Monday that it has completed a deal to acquire the AI coding startup Windsurf.
This announcement follows closely after Google hired Windsurf’s CEO Varun Mohan, co-founder Douglas Chen, and key research staff in a $2.4 billion reverse acquihire, leaving most of Windsurf’s 250-strong workforce. Google’s acquisition took place mere hours after OpenAI’s $3 billion offer for Windsurf expired, allowing the startup to explore other options.
The excitement surrounding Windsurf highlights an intense rivalry in developing AI coding tools, especially the AI-enhanced integrated development environments (IDEs) offered by Cursor and Windsurf. The market for AI-driven IDEs has seen rapid growth recently, boosting Cursor’s annual recurring revenue (ARR) to $500 million. While Windsurf’s numbers are smaller, the company has exhibited notable growth this past year, drawing interest from major enterprises.
“The past 72 hours have felt like the wildest rollercoaster ride of my life,” remarked Jeff Wang, Windsurf’s former business head, who recently took on the role of interim CEO after Google acquired the startup’s leadership, in a LinkedIn update. “To our new colleagues at Cognition: we at Windsurf feel incredibly privileged to join a team that shares our vision, our unwavering dedication to our users, and — most importantly — our values.”
Cognition has confirmed it will acquire Windsurf’s intellectual property and products, including its AI-driven IDE, along with all employees not hired by Google.
Although Cognition did not reveal the purchase price for Windsurf, it noted that Windsurf achieved $82 million in ARR, with its enterprise ARR doubling every quarter. The company reported that Windsurf’s user base has expanded to at least 350 enterprise clients and “hundreds of thousands” of daily active users.
In the immediate future, Windsurf’s team will continue to improve its AI-powered IDE while Cognition works on enhancing its AI coding agent, Devin, as stated in a press release. Ultimately, Cognition aims to integrate Windsurf’s technology and capabilities into its offerings.
TechCrunch reported in April that Windsurf’s ARR had briefly hit $100 million. However, Anthropic — known for its popular AI coding models — cut Windsurf’s direct access to its Claude AI models in June, with co-founder Jared Kaplan expressing concerns that OpenAI, its leading competitor, was on the verge of acquiring Windsurf. Several Windsurf clients informed TechCrunch that they switched to alternative services offering Claude AI models, such as Cursor, following this development.
Cognition stated in its press release that Windsurf will regain full access to Claude AI models.
Over the weekend, The Information disclosed that Windsurf employees who joined within the past year received no payout in Google’s multibillion-dollar reverse-acquihire. This prompted significant backlash on social media, as many felt the deal primarily benefited investors and executives at the startup.
Cognition President Russell Kaplan noted on X that the acquisition of Windsurf came together swiftly over the weekend, shortly after the Google deal was announced. He mentioned the first call occurred after 5 PM on Friday, with the definitive agreement finalized on Monday morning.
Cognition also stated in its blog post that all Windsurf employees will benefit financially from the agreement and will have their vesting cliffs waived for their past contributions.
With the acquisition of Windsurf’s talent and intellectual property, Cognition positions itself as a stronger competitor against giants in the AI coding space, such as OpenAI, Anthropic, and Cursor. In March, Cognition reportedly engaged in discussions to secure hundreds of millions in funding at a valuation of $4 billion. It remains unclear if this funding round was completed, but Cognition may need substantial resources to compete effectively in the AI coding market.
Cognition was one of the pioneers in launching a fully operational AI coding agent, Devin, designed not just to assist with tasks but to automate them entirely, similar to a junior software engineer. This was a bold strategy compared to Cursor and Windsurf, which focused on providing environments that enable developers to utilize AI tools more easily. However, early evaluations indicated that Devin made several errors, suggesting its AI technology might have been ahead of its time.
This may no longer be the case. Recently, both Cursor and Windsurf have begun launching more agent-based AI products that closely resemble those from Cognition. In a recent interview, Cursor CEO Michael Truell expressed his belief that advancements in AI reasoning models are making coding agents more viable, predicting that by 2026, 20% of coding workflows would be managed by agents.
Now, with the acquisition of Windsurf, Cognition has the potential to offer a combination of AI coding agents and an AI-powered IDE, thereby boosting its market appeal. Earlier this week, Cognition also secured a major client in financial powerhouse Goldman Sachs.
With the integration of Windsurf, Cognition seems poised to emerge as a more serious contender in the AI coding landscape.
