In a fast-evolving saga that captures the intensifying battle for AI supremacy, Windsurf—the startup known for its enterprise AI coding tools—has officially been acquired by Cognition Labs. This comes shortly after its high-profile CEO, Varun Mohan, along with other key leaders, joined Google DeepMind. The story underscores how talent and intellectual property are becoming the key battlegrounds in the AI industry.
Here are the key developments summarized in five points:
1. OpenAI’s $3 Billion Acquisition Attempt Falls ApartOpenAI was reportedly in advanced talks to acquire Windsurf earlier this year, with a deal valued at approximately $3 billion. However, negotiations stalled and ultimately collapsed after the exclusivity window expired. According to The Verge and The Wall Street Journal, conflicts around technology overlap—particularly involving OpenAI’s deep relationship with Microsoft—likely complicated the transaction. Meanwhile, Windsurf had already begun conversations with other potential partners.
2. Google Makes Strategic Move Without Buying the CompanyFollowing the collapse of OpenAI’s offer, Google DeepMind moved quickly to hire Windsurf’s top leadership, including Indian-origin CEO Varun Mohan and co-founder Douglas Chen, along with several senior AI researchers. Rather than acquiring the company outright, Google paid $2.4 billion for a non-exclusive license to access Windsurf’s technology. This allowed Google to tap into the talent and tools without owning the startup, which remains operational and open to other collaborations.
3. New Leadership, Same Vision at WindsurfDespite the exit of its founders, Windsurf continues its operations with a reshuffled executive team. Jeff Wang, previously head of business, has taken on the role of interim CEO, while Graham Moreno, the VP of global sales, now serves as president. With roughly 250 employees staying on, Windsurf reaffirmed its commitment to developing enterprise-grade AI tools.
“We aren’t going anywhere,” Wang wrote in a social media post, aiming to reassure both clients and partners.
4. Cognition Labs Steps In to Acquire WindsurfJust as Google absorbed the top talent, Cognition Labs—known for developing Devin, the world’s first autonomous software engineer—announced it has acquired Windsurf. Financial terms of the deal remain undisclosed. Cognition, led by AI entrepreneur Scott Wu, will now integrate Windsurf’s remaining team, infrastructure, and unique IP into its product stack.
“We’re delighted to share that Windsurf is being acquired by Cognition… Our users and customers will remain in steady hands,” the company said in a blog post.
5. AI Talent Wars Are Reshaping the IndustryWindsurf’s story is part of a larger trend in which tech giants like Google, Microsoft, and Meta are aggressively pursuing top AI talent through licensing agreements, acquihires, and strategic investments—often skirting regulatory hurdles tied to traditional mergers. These moves show that in today’s AI landscape, acquiring people and intellectual property may be more valuable than acquiring companies themselves.