Cognition, the startup behind the viral AI coding agent Devin, introduced in a weblog put up on Monday that it has signed a definitive settlement to accumulate AI coding startup Windsurf.
The announcement comes simply days after Google employed away Windsurf’s CEO Varun Mohan, co-founder Douglas Chen, and analysis leaders in a $2.4 billion reverse-acquihire that left a lot of the startup’s 250-person crew behind. Google’s deal occurred simply hours after OpenAI’s $3 billion provide to accumulate Windsurf expired, clearing the way in which for the AI coding startup to discover different choices.
The frenzy round Windsurf represents a brand new peak within the wild race to develop AI coding instruments — particularly, the AI-powered built-in growth environments (IDEs) that Cursor and Windsurf provide. In current months, the companies round AI-powered IDEs have skyrocketed, pushing Cursor’s annualized recurring income (ARR) to $500 million. Whereas Windsurf’s enterprise is smaller than Cursor’s, it has achieved spectacular development within the final yr, garnering curiosity from a number of bigger corporations.
“The final 72 hours have been the wildest rollercoaster journey of my profession,” stated Jeff Wang, Windsurf’s former head of enterprise, who was made interim CEO of the startup days in the past after Google employed the startup’s leaders, in a put up on LinkedIn. “To our new teammates at Cognition: we at Windsurf really feel extremely fortunate to be becoming a member of a crew that shares our imaginative and prescient, our deep dedication to our customers, and – most significantly – our values.”
Cognition says it’s buying Windsurf’s IP and product, which embody its AI-powered IDE, alongside all the workers who weren’t employed by Google.
Cognition didn’t announce the value it acquired Windsurf for; nonetheless, the corporate says Windsurf reached $82 million in ARR, with enterprise ARR doubling quarter-over-quarter. Cognition says Windsurf’s consumer base reached no less than 350 enterprise clients and “tons of of hundreds” of every day energetic customers.
Within the close to time period, Windsurf’s crew will proceed engaged on its AI-powered IDE, whereas Cognition works on its AI coding agent, Devin, the businesses stated in a press launch. Ultimately, Cognition says it’s going to combine Windsurf’s IP and capabilities into its personal merchandise.
iinfoai reported in April that Windsurf’s ARR had reached $100 million at one level. Nonetheless, Anthropic — which provides a few of the hottest AI fashions for coding duties — lower Windsurf’s direct entry to its Claude AI fashions in June, with Anthropic co-founder Jared Kaplan attributing the choice to rumors that OpenAI, its largest competitor, was near buying Windsurf. A number of Windsurf clients advised iinfoai they switched to different providers that provided Claude AI fashions, akin to Cursor, in gentle of the incident.
Cognition notes in its press launch that Windsurf will now have full entry to Claude AI fashions as soon as once more.
Over the weekend, The Info reported that Windsurf workers who had joined within the final yr didn’t obtain a payout in Google’s billion-dollar reverse-acquihire. That prompted many customers on social media to scoff on the deal, which appeared to largely profit buyers and leaders on the startup.
Cognition President Russell Kaplan indicated in a put up on X that the Windsurf acquisition actually got here collectively over the weekend, simply hours after the Google deal was made public. He famous that the primary name was made after 5pm on Friday, and that an settlement was signed Monday morning.
Cognition notes in its weblog put up that 100% of Windsurf workers will take part financially on this deal and have vesting cliffs waived for his or her work so far.
With the addition of Windsurf’s expertise and IP, Cognition might have a supercharged startup to compete with giants within the AI coding house, akin to OpenAI, Anthropic, and Cursor. In March, Cognition reportedly held talks to boost tons of of hundreds of thousands of {dollars} at a $4 billion valuation. It’s unclear if the spherical closed, however Cognition may have such a conflict chest to compete within the AI coding house.
Cognition was one of many first AI startups to launch a fully-fledged AI coding agent, Devin, which didn’t simply assist with duties, however promised to automate them fully as if it had been a junior software program engineer. This was a markedly daring method in comparison with Cursor and Windsurf, which provided environments for builders to simply entry AI instruments. Nonetheless, early critiques discovered that Devin made errors, maybe indicating that its AI agent know-how was forward of its time.
Which will not be the case. In current months, Cursor and Windsurf have began providing extra agentic AI merchandise which are beginning to resemble what Cognition provides. In a current interview, Cursor CEO Michael Truell stated he believes AI reasoning fashions are advancing sufficient to make coding brokers viable, and that he expects 20% of coding workflows to be dealt with by brokers by 2026.
Now, Cognition has the flexibility of providing each AI coding brokers and an AI-powered IDE, maybe enhancing its worth proposition. Earlier this week, Cognition additionally landed a significant buyer within the Wall Avenue juggernaut Goldman Sachs.
With the acquisition of Windsurf, it appears Cognition has develop into a extra severe competitor within the AI coding house.
