WINDSURF GOOD VIBES ACQUISITION BY COGNITION
Even "Vibe Coding" "leftovers" Hitting Multiples, Terms Undisclosed
Google took the wind out of the sails and left Windsurf without propulsion…
THEN, On July 14, 2025, Cognition AI, a rising star in the artificial intelligence sector (“Devin”), announced its acquisition of Windsurf, a prominent AI-assisted coding startup, for an undisclosed sum.
This deal marks a significant step in the intensifying race among tech companies to dominate the AI-powered software development market. [AKA “vibe coding”]
The acquisition follows a high-profile $2.4 billion deal in which Google secured licensing rights to Windsurf’s technology and hired key talent, including its CEO Varun Mohan and co-founder Douglas Chen, leaving Windsurf in a vulnerable position as an independent entity.
Who is Cognition AI?
Cognition AI, founded in November 2023 by Scott Wu, Walden Yan, and Steven Hao, is a startup focused on revolutionizing software engineering through AI.
Its flagship product, Devin, is billed as the "first AI software engineer," capable of autonomously handling entire development projects, from coding to debugging and deploying applications.
In just over a year, Cognition has gained significant traction, raising $175 million at a $2 billion valuation in April 2024, led by Founders Fund. The company’s mission is to accelerate software development by integrating advanced AI tools into the coding process, positioning it as a key player in the competitive AI landscape.
Who is Windsurf?
Windsurf, formerly known as Codeium, was founded in 2021 by MIT graduates Varun Mohan and Douglas Chen. The startup developed an AI-powered integrated development environment (IDE) that enhances coding productivity through tools like Cascade, a chat-based assistant that offers real-time code suggestions and error detection, and Windsurf Previews, which allows developers to test website builds on the fly.
With $243 million raised from investors like Kleiner Perkins, General Catalyst, and Greenoaks, Windsurf achieved an annualized recurring revenue (ARR) of $82 million and served over 350 enterprise customers.
However, Google’s recent deal to acquire its top talent and license its technology disrupted its trajectory as a standalone company.
The Deal and Its Implications
Cognition’s acquisition of Windsurf includes the remaining staff, intellectual property, and the Windsurf IDE, along with its robust user base of hundreds of thousands of daily active users.
According to Scott Wu, Cognition’s co-founder, the company plans to integrate Windsurf’s capabilities into its own products, particularly enhancing its Devin AI software engineer.
This move strengthens Cognition’s position in the AI-driven coding market, where competitors like OpenAI, Microsoft, and Anthropic are also vying for dominance with tools such as GitHub Copilot and Claude Code.
The acquisition comes at a critical time. Just days earlier, on July 11, 2025, Google’s $2.4 billion deal stripped Windsurf of key leadership and researchers, who joined Google’s DeepMind AI division.
left Windsurf struggling to maintain momentum, making it an opportune target for Cognition.
Posts on X reflect excitement about the deal, with users noting Cognition’s gain of an $85 million ARR business and elite talent for a relatively low equity cost, estimated at less than 15% of its $4 billion valuation.
Looking Ahead
Cognition’s acquisition of Windsurf signals a bold step toward consolidating its influence in the AI coding space. By combining Devin’s autonomous coding capabilities with Windsurf’s established IDE and enterprise customer base, Cognition is poised to accelerate innovation for software engineers worldwide.
As the AI industry continues its frenetic pace of acquisitions and talent wars, this deal underscores the strategic maneuvering required to stay ahead in a rapidly evolving market.
FOLKS VIBE CODING IS REAL VIBE MONEY NOW.
Sources: Bloomberg (web:0, web:17), The New York Times (web:2), The Information (web:1), Cognition AI (web:5), X posts (post:0, post:1)
HERE IS WINDSURF’S STATEMENT ON ITS ACQUISITION BY COGNITION
The Next Chapter
Written by
By Jeff Wang
Published on
Jul 14, 2025
4 min read
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We’re delighted to share that Windsurf is being acquired by Cognition. Our world-class team will be joining forces with the iconic company that created Devin, the world’s first autonomous software engineering agent. Our users and customers will remain in steady hands and enjoy better product innovation than ever. And finally, Windsurf’s unique IP will also become integrated into Cognition, helping the joint team continue to push the frontier of AI coding capabilities.
We’ve always believed the future of software development lies in human-AI collaboration – not just automation, but true amplification. Cognition is a perfect fit for Windsurf: combining their autonomous agents with our agentic IDE will lead to breakthrough developer experiences. With this acquisition, two world-class teams are joining forces to shape the next era of AI coding — and we’re just getting started.
This is the note Jeff, CEO of Windsurf, shared with the team:
Team,
First, I want to acknowledge that it’s been a really volatile time at Windsurf. Last week, we lost our founders and our research team. I want to thank you all for being professional in how you have navigated this, because I know it wasn’t easy.
Despite the turbulence, so much of what makes us great is intact. Our momentum is insane, we are doubling our enterprise revenue every quarter, we are creating some of the best channels with Partners and Federal, and we have hundreds of thousands of daily active users.
Today I’m absolutely delighted to share with you that Windsurf is being acquired by Cognition. Our world-class team will be joining forces with the iconic company that created Devin, the first autonomous software engineer. Our customers, as well as our robust pipeline, will remain in steady hands and enjoy better product innovation than ever. And finally, Windsurf’s unique IP will also become integrated into Cognition, helping the joint team continue to push the frontier of AI coding capabilities.
While our options were excellent (again, thanks to your talent and hard work in getting us to this point), Scott and his team were the obvious right choice for us. As you may have heard me (only half jokingly) say before, they were the only team we were scared of. Among all the teams in the AI space, Cognition was literally the one we have respected the most, and they are a perfect fit to bring Windsurf to the next phase.
Cognition is the leading applied AI company, and its flagship agent Devin is already deployed in production-grade codebases at some of the world’s largest companies. Their revenue growth is extraordinary: even faster than our own breakneck pace. Cognition has raised over 300MfromFoundersFundandothers,andwasmostrecentlyvaluedat300MfromFoundersFundandothers,andwasmostrecentlyvaluedat4B, with a strong balance sheet and even stronger customer book and pipeline.
This is also the perfect combination of products. We have pioneered the agentic IDE, while Cognition built the market-leading autonomous agent. Working side by side, we’ll be able to let engineering teams plan a task in Windsurf aided by Devin’s deep codebase understanding, delegate chunks of work to a team of Devins, and tackle the hardest parts yourself in Windsurf with features like Tab and Cascade. Then it seamlessly gets stitched back together all within the same environment. That’s the future we will now create together.
With this deal, two world-class teams are uniting toward a shared vision, with massive momentum at our backs. This combined agent + IDE, along with everything else to come, will be a fearsome combo. Most importantly, we’re now better positioned than ever to serve our fast growing community of users, from vibe coders to indie devs to teams at large enterprises.
I want to end with gratitude and appreciation to our awesome customers, to our new colleagues at Cognition, and to all of you for your truly inspiring talent and commitment to the mission. Thank you.
