Windsurf — one of the fastest-growing AI coding startups in the world — was in talks to be acquired by OpenAI for $3 billion.

Then the deal quietly expired.
OpenAI walked away.
No announcement. No press release. Just... silence.

Hours later, Google DeepMind stepped in — but not to buy the company.

Instead, they:

• Paid $2.4B to license the tech
• Hired away Windsurf’s CEO, co-founder, and top researchers
• Left the company — and 250 remaining employees — behind

Windsurf was suddenly a team without leadership, with a product in limbo, and no acquisition on the table.

That’s when Cognition, the AI startup behind coding agent Devin, made a move.

Within 72 hours, they struck a deal to acquire what was left of Windsurf:
the team, the IP, the product, and the customers.

This is one of the most chaotic — and strategic — collapses and recoveries we’ve seen in the current AI boom.

And it’s packed with lessons for technical founders, early-stage teams, and anyone building in a high-stakes market.

Windsurf Looked Like a Breakout

If you were tracking the devtools and AI IDE space, you probably heard of Windsurf (previously Codeium). They were:

• Posting explosive growth — from ~$40M to nearly $100M ARR in months
• Serving hundreds of enterprise customers
• Competing with Cursor, Anthropic, and even OpenAI’s own Codex stack
• Building a clean, developer-first AI IDE — not just an agent, but a platform

They had momentum. They had revenue. They had suitors.

OpenAI wanted in — hard. And for a while, it looked like the deal would go through.

But ultimately, OpenAI let the clock run out.

According to multiple reports, the decision was intentional. With Microsoft already having access to OpenAI’s IP, acquiring Windsurf would’ve extended that access to Windsurf’s tech too — and OpenAI wasn’t comfortable with that.

So they walked.

Google Didn’t Save the Company — They Took the Brains

Shortly after OpenAI exited, Google DeepMind acted fast — but not in the way most devs think of acquisitions.

Instead of acquiring Windsurf outright, they executed a reverse-acquihire:

• They licensed Windsurf’s technology
• They hired the CEO, co-founder, and senior researchers
• But they didn’t buy the company, product, or team

This move gave Google access to top AI coding talent — without regulatory scrutiny or overhead — and left Windsurf’s business on shaky ground.

The remaining 200+ employees had no leadership.
No acquirer.
And no clear path forward.

For engineers or founders building in this space, that’s a brutal reminder:

Talent gets acquired. Teams get orphaned. Products get left behind.

And if you're not thinking about retention, equity structure, and leadership continuity, you’re putting your startup at risk — even in a hot market.

Cognition Moved Fast — and Took the Rest

While the dust was still settling, Cognition — the team behind Devin, an agentic AI coding assistant — picked up the phone.

By Monday morning, they had:

• Acquired Windsurf’s remaining team, IP, and product
• Gained 350+ enterprise customers
• Inherited $82M ARR
• Restored access to Claude models (which Windsurf had lost during M&A limbo) It was fast. Surgical. And strategic.

Now, Cognition owns both:

• A full-featured AI IDE
• And a coding agent (Devin)
• Plus a much stronger GTM position against players like Cursor, OpenAI, and Anthropic

This wasn’t just a salvage play. It was a calculated market move.

What Developers and Founders Should Learn From This

This isn’t just startup gossip. It’s a playbook for what can go wrong — and right — when you're building in a high-growth, high-risk category.

1. Deals fall apart — even the big ones

Windsurf looked like it had a $3B exit locked up. But it didn’t close.

As a founder or early engineer, don’t plan around a deal until it’s signed — and even then, understand who really benefits from it.

Momentum ≠ certainty.

2. Reverse-acquihires are real — and brutal

Google didn’t buy Windsurf. They bought its brains. And left the business behind.

3. Speed is a weapon

Cognition didn’t spend six months doing due diligence.
They made a move in 72 hours.

Whether it’s sales, partnerships, hiring, or M&A — speed isn’t just about execution. It’s a strategic advantage when the window opens.

Most companies react. The best ones pounce.

4. Building in volatile spaces requires constant awareness

This story shows just how fast power shifts in AI — and how much of that shift happens behind the scenes.

You can’t build in a bubble.
You need to know who’s raising, who’s struggling, and which partners are likely to bail.

That’s not gossip — it’s survival.

Final Thought

Windsurf built something real. They had traction, a killer product, and multiple suitors.

But a combination of timing, politics, and fast-moving players pulled them apart and reassembled them into a completely different future — all in the span of a weekend.

If you’re building right now, here’s what to remember:

In fast markets, the best product doesn’t always win.
The fastest, most prepared company does.

👇 Building in a fast-moving market?

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