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It looked like a classic tech success story. An AI startup on the brink of a major acquisition, with giants waiting to strike a deal. Windsurf, a fast-growing company known for building a developer-first AI-powered IDE, was reportedly headed for a $3 billion acquisition by OpenAI. Then, over one weekend, everything changed. The deal collapsed, the founders left, and several senior engineers and product leaders joined Google as part of a talent and licensing deal.
With leadership gone and much of the team in limbo, the company’s future was suddenly unclear. That is when Cognition AI, an emerging player best known for launching AI software engineer Devin, stepped in to acquire what was left: Windsurf’s product, customer accounts, and the employees who stayed.
The terms of the Cognition deal were never officially disclosed, but industry insiders suggest it was structured as an asset acquisition, not a full corporate buyout. Cognition took control of Windsurf’s product, brand, contracts, and internal tooling, while the IP was licensed to Google and the departed leadership remained out of scope.
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For Cognition, it was a fast and targeted move to absorb a mature IDE platform and established customer base. These were resources that could complement its autonomous software agent Devin without the overhead of rebuilding from scratch. According to Cognition’s blog post, Windsurf had reached $82 million in annual recurring revenue (ARR) and was serving over 350 enterprise customers. For Windsurf’s remaining team, it meant continuity under new leadership rather than full dissolution. It was a second chance, even if it came under very different circumstances.
“The last 72 hours have been the wildest rollercoaster ride of my career,” wrote interim CEO Jeff Wang in a LinkedIn post shortly after the deal. He described feeling “overwhelmed with excitement and optimism, but most of all, gratitude,” as the team held steady through a turbulent few days.
“Trying times reveal character,” he added, highlighting how the Windsurf team showed up for each other and their users. Joining Cognition, he said, was not just about salvaging what was left. It felt like stepping into a team that shared their purpose and principles.
What happened with Windsurf fits into a pattern that’s become increasingly common in tech: the reverse acqui-hire. Instead of buying a startup outright, big companies are cherry-picking what they want—usually the founders and top engineers, while leaving the rest behind. It’s faster, avoids antitrust headaches, and skips the complexity of a full acquisition. That’s exactly what happened here. Google brought on Windsurf’s leadership and a slice of its talent, licensed some of the tech, and moved on.
The rise of reverse acqui-hires is changing what startup outcomes actually look like. For founders and top engineers, it can mean a soft landing with a big paycheck and minimal risk. But for the rest of the team, it often means getting left in the dark or scrambling for stability. It also blurs the line between an acquisition and a breakup, where companies are being quietly dismantled, piece by piece, with no formal deal ever announced.
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In the current climate, where regulatory pressure makes full takeovers more complicated, this model is fast becoming the new normal. And for startup teams, it raises a tough question: is the exit plan still about the company, or just the top talent that investors care about?
That’s what made the Windsurf–Cognition outcome stand out. In many reverse acqui-hires, the core team moves on, the product gets shelved, and the rest of the company is quietly left behind. This time, the story played out differently. Cognition kept the product alive, brought over the remaining staff, and, according to Wang, structured the deal to take care of everyone. Payouts were made, cliffs were waived, and equity vesting was accelerated.
The fit between the two companies also helped. Windsurf had a polished IDE, real users, and a strong go-to-market team. Cognition, while technically strong, hadn’t built out much on the customer-facing side. Windsurf had reportedly doubled its enterprise ARR quarter-over-quarter, according to Cognition, momentum that Cognition’s team lacked but now inherits. The combination gave both teams what they were missing.
That combination comes at a time when AI dealmaking shows no signs of slowing. The past year alone has seen Meta invest $14.3 billion in Scale AI, Google strike a $3 billion deal with Character.AI, and Amazon hire founders from Adept. These are all examples of companies racing to lock in talent, tooling, and early advantage. As the AI frenzy continues, we can expect more companies to improvise through reverse acqui-hires and hybrid acquisitions.