Days after AI coding startup Windsurf revealed that its being acquired by Cognition, Windsurf exec Jeff Wang took to X to provide more details about the drama and uncertainty around the deal.Windsurf was formerly reported to be in acquisition talks with OpenAI, however that offer broke down, with Google DeepMind instead employing the start-ups CEO Varun Mohan, co-founder Douglas Chen, and a few of its leading scientists.
Google would apparently license Windsurfs innovation as part of the $2.4 billion deal however not take an equity stake in the company.This looked like the most recent in the pattern of reverse acquihires, in which big tech companies look for to avoid antitrust analysis by hiring essential startup staff member and licensing their innovation, instead of acquiring startups outright.But what occurs to the startups and the employees who get left behind? As we talked about on the most recent episode of Equity, one startup creator compared the leaving Windsurf executives to a captain abandoning his team on a sinking ship.Wang, who had been Windsurfs head of organization, became the business interim CEO after Mohans departure.
In his post on X, he provided some compassion to Mohan and Chen, who he referred to as terrific creators in a circumstance that must have been hard for them as well.Still, Wang recounted an all-hands meeting on Friday, June 11, where most team members were expecting to find out about the OpenAI acquisition.
Rather, he needed to share the news about the Google deal and resulting departures.The state of mind was really bleak, Wang said.
Some individuals were upset about monetary outcomes or coworkers leaving, while others were worried about the future.
A couple of remained in tears, and the Q&A had been naturally hostile.Techcrunch eventSan Francisco|October 27-29, 2025In Wangs view, although the business had lost some excellent individuals and taken a severe blow to morale, it still had all of our IP, item, and strong talent consisting of an excellent [go-to-market] machine.
Windsurf might still try to raise more cash, sell, or simply keep going.That night, nevertheless, Wang heard from Cognition executives Scott Wu and Russell Kaplan, and he said Windsurf leadership took the Cognition approach very seriously from the start and released right into negotiations.
In his telling, what followed was a frantic weekend of discussions with Cognition, while considering inbound interest from other possible acquirers and conference with Windsurfs remaining engineers to convince them not to leave.
(And as all that was happening, the timeline was blowing up with memes and commentary.)The two companies are an excellent fit, Wang argued, in part because of complementary teams.While [Cognition] had actually overinvested in engineering, they had frankly underinvested in GTM and Marketing, and our groups in those functions are absolutely nothing except world class, he stated.
On the other hand, we now were missing out on a Core Engineering group, and theres no much better group of AI engineers than the lineup Cognition has assembled.Plus, Wang said he and Wu (envisioned together above) were lined up on the requirement to look after all Windsurf employees.That resulted in an essential part of the offer: structuring it to provide a payment to every worker, to waive all cliffs, and to speed up all vesting for Windsurf equity, he said.The acquisition contract was apparently signed at 9:30 am on Monday morning, announced to the team soon later on at another all-hands, then revealed to the general public quickly after that.In an interview with Bloomberg, Wang explained that Friday all-hands as most likely the worst day of 250 peoples lives, followed Monday by most likely the best day.