Cognition AI Acquires Windsurf Amid Escalating AI Arms Race

Published: 15 Jul 2025

Author: Precedence Research

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An Artifical Intelligence startup that provides a software coding assistant, Cognition AI, has acquired its rival company, Windsurf, as a strategic move to lead in the technology battle. Google completed the deal for an amount of USD 2.4 billion to acquire some brilliant minds – top executives from the windsurfing industry and licenses for startup technology. Open AI was also looking to make a deal before the Google deal to acquire Windsurf. 

A co-founder of cognition, Scott Wu, said in an email to employees, "We've long admired the Windsurf team and what they've built. In our lifetime, engineers will go from bricklayers to architects, focusing on the creativity of designing systems rather than the manual labor of putting them together." 

In a competitive space created with a sudden sense of urgency by Meta, OpenAI, and Google, the quest to achieve AI superintelligence by rivaling one another has significantly stirred up the global market. Instead of outright purchases, which are the usual market deals, big tech companies are increasingly restructuring such deals, such as positioning them as investments. Some of the recent examples of such moves include Meta, which hired top executives from AI startup Scale AI and invested USD 14.3 billion to expand their commercial agreement. Another was Google, which invested USD 3 billion in a startup named Character AI by sharing its talent pool and technology. About a year ago, Amazon also made a similar investment with an AI company named Adept. 

According to a letter sent to Windsurf employees, Cognition AI mentions that their deal would allow Windsurf employees to leverage the financial benefits of Cognition AI. Furthermore, employees with equity will gain an ‘accelerated vesting’ schedule, which means their stock can be cashed in before the expected vesting date. Cognition AI offers an AI coding assistant called Devin, which helps software developers generate programs more effectively with a lower error rate. 

After the Google deal, windsurf executives worked over the weekends to restructure its working pattern. Windsurf had many suitors. However, Cognition AI provided the strongest terms and a substantial deal, which will offer significant benefits to every employee.