On July 14, 2025 Cognition, the maker of the AI software-engineering agent Devin, announced it had signed a definitive agreement to acquire Windsurf, an agentic coding IDE. Cognition said the deal included “Windsurf’s IP, product, trademark and brand, and strong business,” citing $82 million of annual recurring revenue with enterprise ARR doubling quarter over quarter, more than 350 enterprise customers and hundreds of thousands of daily active users. Cognition said 100 percent of Windsurf employees would participate financially in the deal, have vesting cliffs waived, and receive fully accelerated vesting for work to date.
The acquisition followed a turbulent sequence. OpenAI had agreed to buy Windsurf for a reported $3 billion, but the deal fell apart when its exclusivity period expired on July 11, 2025. Google then announced it was paying to license Windsurf’s technology on a non-exclusive basis and hiring CEO Varun Mohan, co-founder Douglas Chen, and several researchers into Google DeepMind. Cognition stepped in for what remained of the company within days.
Why business readers should care: the Windsurf episode shows how quickly a high-value startup can be carved up among rivals - a collapsed acquisition, a licensing-and-hiring deal that takes the founders, and a final purchase of the leftover assets and staff - all within a single week, driven partly by an acquirer’s existing partnership constraints.