Cognition AI Acquires Windsurf, Adding $82 Million in ARR and Ensuring Employee Equity

San Francisco, CA – Cognition, the artificial intelligence startup behind the AI coding agent Devin, has announced its acquisition of Windsurf, an AI-powered integrated development environment (IDE) platform. This strategic move, which includes Windsurf's intellectual property, product, brand, and its remaining workforce, follows a period of intense competition and prior acquisition attempts for Windsurf in the rapidly evolving AI coding market.

The acquisition comes on the heels of a complex series of events for Windsurf. Earlier, a reported $3 billion acquisition bid from OpenAI fell through. Subsequently, Google entered into a $2.4 billion "reverse acquihire" deal, securing Windsurf's CEO Varun Mohan, co-founder Douglas Chen, and key research staff, along with a non-exclusive license to certain Windsurf technologies. This left the majority of Windsurf's 250 employees and its core business assets available.

Cognition's deal for Windsurf, while undisclosed in financial terms, is notable for its comprehensive approach and employee-centric structure. Windsurf reported $82 million in annual recurring revenue (ARR) and served over 350 enterprise customers with hundreds of thousands of daily active users, with its enterprise ARR doubling quarter-over-quarter. Crucially, Cognition has stated that 100% of Windsurf employees will participate financially in the deal and have vesting cliffs waived for their work to date.

The acquisition has been lauded by some industry figures, including Delian Asparouhov, a co-founder of Founders Fund, which backs both companies. In a public statement, Asparouhov remarked, "> In a world of fake acquisitions by the Mag 7 that break the fundamental social contract of the Valley & are lame as fuck, Cognition is doing the RIGHT & SMART thing by taking over Windsurf, treating the employees right AND now you have the best AI-coding team all in one place!!" This sentiment was echoed by Jeff Wang, Windsurf's interim CEO, who stated in an email to employees that Cognition was "literally the one we have respected the most, and they are a perfect fit to bring Windsurf to the next phase."

The integration of Windsurf's AI-powered IDE with Cognition's autonomous software engineering agent, Devin, is expected to create a more versatile offering in the AI coding space. Cognition co-founder and CEO Scott Wu affirmed his commitment to the Windsurf team, noting his priority was "to honor their talent, hard work, and accomplishments in making Windsurf the great business it is today." Furthermore, Windsurf will regain full access to Anthropic's Claude AI models, which had been restricted due to previous acquisition rumors involving OpenAI. This acquisition positions Cognition as a more formidable competitor against major players in the AI coding market.