Summary:
Windsurf, an AI startup, was almost acquired by OpenAI for $3 billion before the deal fell through
Google stepped in, licensing Windsurf's tech and acquiring its CEO and top researchers for $2.4 billion
Within days, Cognition acquired the remaining parts of Windsurf, highlighting the fierce competition for AI talent
The acquisition brings Cognition $82 million in annual recurring revenue and a vast user base
Google and Cognition both see strategic value in the deal, with visions for the future of AI in software development
The AI industry's fierce competition for talent has led to a dramatic weekend for Mountain View-based startup Windsurf. Initially eyed by OpenAI for a $3 billion acquisition, the deal collapsed, setting off a chain of events that saw Google license Windsurf's technology and acquire its CEO and top researchers for $2.4 billion. By Monday, the remaining pieces of Windsurf were acquired by San Francisco-based Cognition, marking a whirlwind 72 hours for the startup.
A Rollercoaster Ride for Windsurf Jeff Wang, who stepped into the CEO role after Google's acquisition of Varun Mohan, described the experience as "the wildest rollercoaster ride of my career." The rapid succession of events highlights the intense battles among tech giants like Google, OpenAI, Microsoft, Meta, and Anthropic for dominance in the AI space.
Cognition and Windsurf: A Strategic Match Cognition, known for its "AI software engineer" Devin, found a complementary partner in Windsurf, which specializes in code-writing products. Wang praised Cognition as the "perfect fit," noting their respect for the team and even admitting, "they were the only team we were scared of."
The Aftermath and Future Visions Google's acquisition of Windsurf's top talent is a significant win in the AI talent war, with the company excited to advance its work in agentic coding. Meanwhile, Cognition's CEO Scott Wu looks forward to integrating Windsurf's product, intellectual property, and talent, envisioning a future where engineers focus more on creativity than manual labor.
Financial Implications Windsurf's employees and investors will benefit from the acquisition, with equity awards vesting ahead of schedule. The deal also brings Cognition $82 million in annual recurring revenue and access to hundreds of thousands of coders.
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