Cognition, the company behind the AI coding agent Devin, has announced it will acquire the AI startup Windsurf. The deal was confirmed in a blog post on Monday, just days after Google hired away Windsurf’s CEO, co-founder, and research leaders in a separate $2.4 billion reverse-acquihire.
Google’s move came shortly after OpenAI’s $3 billion offer to buy Windsurf expired, leaving the company to explore other options. The series of events highlights the growing competition in the AI coding tools market, where startups like Windsurf and Cursor have seen rapid growth. Cursor currently leads with $500 million in annualized recurring revenue (ARR), but Windsurf has also been expanding quickly, reaching $82 million in ARR and securing over 350 enterprise customers.
Cognition said it is acquiring Windsurf’s intellectual property, products, and all employees who were not hired by Google. The company did not disclose the price of the acquisition. Windsurf’s former head of business, Jeff Wang, who was made interim CEO after Google’s deal, said in a statement that Windsurf is excited to join Cognition and looks forward to continuing its mission.
The acquisition gives Cognition control of Windsurf’s AI-powered coding environment, which will continue to operate for now. Eventually, Cognition plans to integrate Windsurf’s technology into its own products. Cognition’s president, Russell Kaplan, said the deal came together quickly over the weekend, with the first call happening Friday evening and the agreement signed by Monday morning.
Cognition also promised that all remaining Windsurf employees will participate financially in this deal, and their vesting cliffs have been waived. This contrasts with the Google deal, where many recent Windsurf employees reportedly did not receive a payout.
Windsurf had faced challenges in recent months after Anthropic cut off its access to Claude AI models in June due to rumors of an OpenAI acquisition. That decision caused some Windsurf customers to switch to other services like Cursor. Cognition says Windsurf will now regain full access to Claude AI models.
With this acquisition, Cognition is expanding its role in the AI coding space. While Devin was one of the first AI agents designed to automate coding tasks, competitors like Cursor and Windsurf have recently introduced more advanced coding agents as well. Analysts believe the market for AI coding agents and AI-powered development tools will grow significantly, with some predicting that 20% of coding tasks will be handled by AI agents by 2026.
Cognition has also secured major clients like Goldman Sachs and has reportedly been in talks to raise hundreds of millions of dollars at a $4 billion valuation. With Windsurf now on board, Cognition is positioning itself as a stronger competitor against industry leaders such as OpenAI, Anthropic, and Cursor.
