Cognition Scoops Up Windsurf After OpenAI Deal Breaks Down; Key Execs Head to Google

AI startup Windsurf is officially off the marketbut not to OpenAI. Instead, Cognition has stepped in with a deal to acquire the company after OpenAIs $3 billion bid fell apart. And in a surprising twist, Windsurfs top leadershipincluding CEO Varun Mohanhas jumped ship to Google.

Cognition is taking over everything: Windsurfs intellectual property, products, branding, and business operations. As part of the deal, all Windsurf employees will share in the financial upside; no waiting around for equity to vestCognition has waived cliffs and fast-tracked rewards for work already done.

So, what went wrong with OpenAI? According to sources, the deal collapsed over concerns tied to Microsoft (MSFT, Financials), OpenAIs close partner. There were worries that Windsurfs tools might overlap with Microsofts Copilot producttoo much, too soon. That gave Google (GOOGL, Financials) an opening. In a separate $2.4 billion hiring deal, the tech giant brought over key Windsurf talent, including Mohan, co-founder Douglas Chen, and several top engineers. Theyve all landed at DeepMind, where theyll help drive Googles AI agent push, particularly through its Gemini platform.

Cognition, meanwhile, is integrating Windsurfs development tools directly into its flagship AI coder, Devin. The vision? A smarter, more autonomous IDE where developers can map out projects, delegate tasks to multiple Devins, and see it all come together in one placewith diagrams, checklists, and code suggestions woven into the workflow.

Both companies were already aligned in their mission to reinvent how software gets written; this deal just fast-tracks that future. AI wont just help you write codeit might soon help run the entire show.