AI coding assistant startup Cognition acquires rival Windsurf – News

Cognition AI Inc., a well-funded startup with an artificial intelligence coding assistant, today announced plans to buy rival Windsurf.

The terms of the deal were not disclosed.

The sale caps off an eventful few months for Windsurf. The startup, which is incorporated as Exafunction Inc., reportedly received a $3 billion takeover bid from OpenAI in April. Last week, it declined the offer and instead signed a $2.3 billion technology licensing deal with Google LLC.

The deal saw Windsurf founders Varun Mohan and Douglas Chen join the search giant along with several researchers. Most of the company’s 250 staffers have reportedly remained in their roles. Jeff Wang, Windsurf’s head of business prior to the deal with Google, is now interim chief executive.

Windsurf’s flagship product is an eponymous code editor with a built-in AI assistant. The assistant can explain how a piece of code works, generate new code and scan it for bugs. The editor also offers other features, including a tool that allows developers to quickly preview the interface of a newly created website.

San Francisco-based Cognition competes in the same market. Its flagship Devin coding assistant can automate many of the same tasks as Windsurf, as well as provide a step-by-step overview of how it completes those tasks. Developers can manually optimize those steps to enhance the AI’s output.

Cognition sells an enterprise version of Devin that includes several additional features. It provides the ability to fine-tune the assistant’s AI models using proprietary datasets, which boosts output quality. Customers can optionally deploy their customized versions of Devin on their own infrastructure. 

The acquisition of Windurf comes four months after Cognition reportedly raised “hundreds of millions of dollars” in funding. According to Bloomberg, the investment doubled its valuation to $4 billion.

In a blog post, Cognition co-founder and CEO Scott Wu disclosed that Windsurf has hundreds of thousands of daily active users. That installed base base is generating $82 million in annualized sales. Windsurf’s revenue from enterprise customers, in turn, is doubling quarter-over-quarter. 

“In the immediate term, the Windsurf team will continue to operate as they have been, and we will remain focused on our work of accelerating your engineering with Devin,” Wu wrote. “Over the coming months, we’ll be investing heavily in integrating Windsurf’s capabilities and unique IP into Cognition’s products.”

Windsurf relies on Anthropic PBC’s Claude series of large language models to power some of its features. After word of OpenAI’s takeover effort emerged in April, Anthropic cut access to its LLMs. Wu wrote today that Windsurf will have “full access to the latest Claude models” following its acquisition by Cognition. 

Image: Cognition