Windsurf CEO opens up about ‘very bleak’ mood before Cognition deal

In a dramatic turn of events, AI coding startup Windsurf has been acquired by Cognition, following a turbulent period of uncertainty. Jeff Wang, the head of business at Windsurf who stepped in as interim CEO after the departure of co-founders Varun Mohan and Douglas Chen, took to social media platform X to shed light on the challenges surrounding the acquisition process. Previously, Windsurf was in discussions to be acquired by OpenAI, but those negotiations fell through. Instead, Google DeepMind hired several key figures from Windsurf, including CEO Varun Mohan, while also reportedly planning to license the startup’s technology as part of a $2.4 billion deal. This shift reflects a growing trend in the tech industry, where larger companies opt for 'reverse acquihires'. These involve hiring essential team members from startups and licensing their innovations instead of outright acquisitions, a strategy aimed at avoiding antitrust scrutiny. Amid this upheaval, the morale at Windsurf took a hit. During a crucial all-hands meeting, Wang had to inform the team that rather than news of a successful acquisition by OpenAI, they faced the reality of Google’s deal and the departure of their leadership. "The atmosphere was quite grim," Wang recalled. Many employees expressed concerns over their financial futures and the loss of colleagues, with some visibly distressed. Despite the setback, Wang emphasized that Windsurf still retained its intellectual property, products, and talented workforce, which could enable the company to explore new funding opportunities or continue operations independently. As discussions progressed with Cognition, Wang highlighted the urgency of keeping the remaining engineers engaged and committed to the company. He noted a flurry of activity over the weekend as negotiations intensified, alongside a social media storm filled with memes and commentary about the situation. Wang pointed out that Cognition's strengths complemented Windsurf's needs, particularly in marketing and go-to-market strategies. With a shared vision for employee welfare, the acquisition deal was structured to ensure all Windsurf employees received a payout, waived cliffs, and accelerated vesting of their equity. The acquisition was formalized early Monday morning and promptly communicated to the entire team. Wang described the preceding Friday as potentially the worst day for many employees but contrasted it with the optimism that followed the acquisition announcement, marking a hopeful new beginning for Windsurf under Cognition's umbrella.