Google hires Windsurf’s leaders as Cognition buys the rest

Google has hired Windsurf CEO Varun Mohan, co-founder Douglas Chen and some of its research and development leaders. The deal, valued at $2.4 billion, gives Google a non-exclusive license to the technology developed by the AI coding tools company.

The transaction did not amount to an acquisition of Windsurf. But it left the startup without its two founders and opened the door to a second deal: Cognition, the company behind the Devin coding agent, signed an agreement Monday to acquire the remaining business, including its product, intellectual property and employees who are not moving to Google.

The outcome compresses one of the year’s fiercest AI software battles into 72 hours. OpenAI had negotiated to buy Windsurf for about $3 billion, but its offer expired last Friday without closing. The agreement with Google became public shortly afterward and, over the weekend, Cognition negotiated to acquire the remaining assets.

A deal that separates talent, technology and the company

Windsurf develops an integrated development environment, or IDE: the application where developers write, test and organize their code. Unlike a conventional editor, it incorporates AI models that can suggest changes, explain errors and execute coding tasks from within the same environment.

Google is taking on its top technical leaders and a license to use some of that technology, while Windsurf continues under Cognition. The structure is known as a reverse acquihire: rather than formally acquiring an entire company, a major technology company hires its leadership team and licenses its technology.

For Google, the deal strengthens DeepMind in a market where coding has become one of the defining tests for language models. For Windsurf, it keeps the product from disappearing after the departure of its leaders. And for Cognition, it offers a fast route to adding an established coding interface to Devin, its autonomous agent.

The structure also illustrates a trend regulators are watching closely. Big tech companies have turned to technology licenses and mass talent hires instead of traditional acquisitions—transactions that can reshape competition without taking the form of a conventional full-company purchase.

Cognition takes on remaining employees, customers and product

Cognition has said it will bring on every Windsurf employee who was not hired by Google. The company also says that 100% of this workforce will participate financially in the deal and that vesting cliffs already accumulated will be waived.

That detail addresses a sensitive issue. Google’s deal drew public criticism because, according to The Information, some employees who had joined over the past year would not receive payouts from the $2.4 billion agreement. Cognition is now attempting to offer a financial outcome to everyone who remains connected to Windsurf.

The acquisition includes a business that, while smaller than Cursor, has grown quickly. Cognition puts Windsurf’s annualized recurring revenue at $82 million, with enterprise revenue doubling quarter over quarter. The platform has at least 350 enterprise customers and hundreds of thousands of daily active users.

The announcement comes after a significant setback. In June, Anthropic restricted Windsurf’s direct access to Claude, one of the models most widely used for coding. The move coincided with rumors that OpenAI was acquiring the company and prompted some customers to look for alternatives. Cognition says Windsurf will now regain full access to Claude models.

From Devin to the environment where coding happens

Cognition launched Devin in 2024 with a different ambition from that of conventional coding assistants: not merely to suggest snippets, but to take on complete tasks like a junior engineer. Early public tests showed that the agent made mistakes and needed supervision, but the category has evolved quickly.

Cursor and Windsurf, initially focused on bringing AI into the editor, have gradually added more autonomous capabilities. The acquisition allows Cognition to combine both layers: a workspace for developers and an agent that can execute tasks inside it.

The competition is no longer just about who has the most capable model. It also depends on who controls the programmer’s daily interface, access to third-party models and relationships with businesses. Cognition also announced Goldman Sachs as a Devin customer. With Windsurf, it gains a product, distribution and a user base at a time when OpenAI, Anthropic, Google and Cursor are competing to turn AI-assisted coding into an enterprise software platform.