I think the amount of turmoil around these deals is giving more weight to the possibility that we’re in a massive bubble thats quite divorced from any kind of fundamentals. Sooner or later the bubbles gonna burst.
Unpopular, controversial take: there should be an LSP extension that lets CLI agents, like Claude Code show diffs in the editor, and also one for completions, and sending snippets back to the CLI.
That, by itself, would obliterate the entire value of Windsurf or Cursor or whatever. The fact that Google has this kind of money and spends it on dubious "talent" (though none of these people are known in the community) is a testament to how overfunded tech companies are compared to the value that they provide.
I don't see a justification for high valuations of companies that aim to build an "AI Software engineer". If something like Devin really succeeds, then anyone can use their product to simply build their own competing AI engineer. There's no moat, it's just another LLM wrapper SaaS.
I was a bit confused as to what "Cognition" was, but they're the makers of Devin (edit: that just got added to the title, for reference), so that makes sense. Just buying the competition, the only surprise is they had more money to spend than the big ones.
Let this be a learning lesson in judging these deals based on partial information. Kudos to the Google, Windsurf, and Cognition teams for keeping all of these deals under wraps until announcement (OpenAI could learn something...), but even so it's likely that we the public will never learn every detail of what transpired. I've seen a lot of harsh, misguided takes over the past few days, like that the Windsurf founders screwed over their employees, or that OpenAI reneged on the deal. In this case, this seems like a happy ending for all parties involved: congrats to the Windsurf team!
I’m really confused now. Also, is there really that much of a transformative difference between Windsurf and say OpenAI/Claude etc to warrant this crazy valuations?
I just started trying out Codeium in Nvim on a recommendation from a video that's like, less than 6 months old. Oops, actually, codeium is Windsurf now. But the tool is still codeium.nvim at least.
It's weird being a Windsurf fan on HN. You get the feeling that you're in the minority or doing it wrong because the dialog is dominated by Cursor and (more recently) Claude Code.
It's also been a lot of random stuff recently with their 3 separate Ross and Rachel acquisition storylines.
Some takeaways:
1. Devin/Cognition definitely have a legit AI dev agent now
2. It's crazy what Google passed on. The fact that it was worth it to them without the traditional best assets is wild. Guess that's what happens when you play on ultra hard mode with an infinite money glitch.
3. I am worried/pre-emptively sad that Windsurf will likely go away or get nerfed, more expensive etc.
Does anyone actually use Windsurf? I know a ton of people on Cursor, Cline, Roo, Claude Code... but zero people in my engineering circles have even mentioned trying Windsurf.
I have been testing Devin for a long time, early access and all. I'm not impressed by it at all, a decent developer with their LLM of choice does a far better job.
Very curious how we'll look back on Google spending 2 billion dollars to "license IP" and hire a handful of people.
If there's 47m software engineers in the world, at $200/month, and 50% gross profit that's a $56 billion TAM. Not crazy to think it's more if we include the adjacent space of analyst roles that write software (sql, advanced excel, etc).
They'll have to crush it to make a $2 billion acquihire look reasonable, but it's possible.
I've never heard of Cognition (not a slight on them, its just me being disconnected). How much was the deal for and how do they have this type of money? Wasn't there just an article out yesterday or so saying that Windsurf's leadership was going to google?
Great news...saw Windsurf vibing on YC podcast several months ago...and it's my go-to now. Google Gemini Pro 2.5 works best for me (Python, C++, Fortran).
I totally missed the puck with this one. There was a time where Cursor did not have the agent feel of a true AI pair-programming buddy. Windsurf had that magical aspect, and I totally thought they would destroy Cursor. But it took Cursor about 2 weeks by my recollection to add agent mode, and ultimately I went back to Cursor because of their better WSL2 integration.
For those brief 2 weeks, Windsurf felt like the SOTA tool. Crazy how the winds change.
I writing this just after the night end llm cannot even replace to using Trans i18n react component if it is not in context of the file. We are still far from agi
Having been acquired by Google, there is always a leeway for the execs to take the employees with them. Google is a weak negotiator when they NEED something.
On the other hand, I can imagine the execs taking Google golden handcuffs while trying to close the Cognition deal so the employees are made whole or maybe even on better terms than if they all went to Google.
> This transaction is structured so that 100% of Windsurf employees will participate financially. They will also have all vesting cliffs waived and will receive fully accelerated vesting for their work to date.
Uhh so where does the 2.4B go to? For the "licensing" rights but without equity to Windsurf? Does the whole 2.4B get distributed amongst the talent that Google acquired or is it shared amongst all Windsurf employees?
This is the logical, satisfying, and probably best conclusion to an un-ideal and optically terrible situation all parties were placed in.
First, OpenAI wanted to acquire Windsurf. Terrific move! Win-win for OpenAI (who needs more AI product) and Windsurf (for the deal price). But this fell apart because Windsurf didn't want the IP to go to Microsoft (which imo should not have been not a big deal, especially if you knew what would have happened next). Big loss for all parties for this to have fallen apart.
My biggest question still is why not continue on as an independent company? Perhaps losing access to Claude doomed signups; perhaps employees/investors had a taste of an exit and still wanted it; perhaps due to fiduciary duty to maximize returns; perhaps their growth stalled due to the announcement? In any case, the founders got a similarly equivalent deal from Google, and were arguably wise to pursue it.
But Google's Corp Dev team here is the most maddening. Why not fully acquire the entire company, instead of doing the same "acquihire and license" deal that was done to Character AI, Adept, Scale, etc.? Risk of FTC antitrust review is a thing, but Google's not even competitive in the coding market, so I doubt there is a review (though I do hear that all acquisitions by large tech companies these days are reviewed by default). If there's anyone to blame in this situation, it's the FTC and Google for pursuing this strategy, instead of a full acquisition. Win-win for Google (for the team) and Windsurf (for getting a similar acquisition price, but liquid!).
Imo, the founders did a good job ensuring that close to the $3B acquisition price was reflected in the $2.5B Google deal--all existing investors and vested employee/equity holders are paid out; the company also retained $100M which was suspiciously similar to the amount needed to pay out all unvested employee/equity holders [1]. So theoretically the remaining company could pay accelerate vesting, then pay out the cash to their remaining employees, and then shut down, to give everyone the same exit as an acquisition, or better. This might have been the best scenario, because the brand damage to Windsurf as an IDE that happened over the weekend was pretty close to unrecoverable for them as an independent company.
But instead, the company leadership decided to field acquisition offers for the remaining company and IP, and got one from Cognition. (I'm actually surprised this acquisition isn't under FTC review; it's more plainly an agentic coding company acquiring a competitor agentic coding company). In taking the offer, it reinforces that the Windsurf IDE will continue to exist, that they have a R&D team backing the IDE again, and can marry Windsurf's enterprise sales chops with Cognition's product [3]. Win-win for both Cognition and Windsurf.
So overall, win-win-win all around, except for OpenAI, Varun's public reputation (imo, undeserved), and startups hiring employees (who might think they might not get a proper exit) [2].
I wonder if we'll ever stop to ask ourselves if faster and faster output of software is actually a good thing for the world. Or will we just continue because it's just what we do nowadays in civilization to get ahead?
My name is Devin; it has been for many decades now. I'm embarrassed to see you've named your product after me. It has already prompted uncomfortable jokes at my expense, and I'm sure there will be more. I now have newfound empathy for people named Alexa.
For instance, people have made jokes about my name in interviews, and it's embarrassing for me, and thus awkward for everyone, and awkward interactions make it objectively less likely that I will get job offers.
I don't think any product should be named after people. Please change the name of Devin.
Cognition (Devin AI) to Acquire Windsurf
(cognition.ai)502 points by alazsengul 14 July 2025 | 435 comments
Comments
OpenAI’s Windsurf deal is off, and Windsurf’s CEO is going to Google - https://news.ycombinator.com/item?id=44536988 - July 2025 (679 comments))
Attended Windsurf's Build Night 18 hours before founders joined Google DeepMind - https://news.ycombinator.com/item?id=44539884 - July 2025 (1 comment)
That, by itself, would obliterate the entire value of Windsurf or Cursor or whatever. The fact that Google has this kind of money and spends it on dubious "talent" (though none of these people are known in the community) is a testament to how overfunded tech companies are compared to the value that they provide.
Does this represent confirmation that there was no pro-rata compensation to common share holders in the Google deal?
I just have so many questions.
Cognition being worth $4B with Devin being raced to zero by Claude Code also undercutting both Windsurf and Cursor have a very steep hill to climb.
Having both Devin and Windsurf will just make them raise more money as they burn through their operational costs.
I guess it's about to happen again!
It's also been a lot of random stuff recently with their 3 separate Ross and Rachel acquisition storylines.
Some takeaways:
1. Devin/Cognition definitely have a legit AI dev agent now
2. It's crazy what Google passed on. The fact that it was worth it to them without the traditional best assets is wild. Guess that's what happens when you play on ultra hard mode with an infinite money glitch.
3. I am worried/pre-emptively sad that Windsurf will likely go away or get nerfed, more expensive etc.
If there's 47m software engineers in the world, at $200/month, and 50% gross profit that's a $56 billion TAM. Not crazy to think it's more if we include the adjacent space of analyst roles that write software (sql, advanced excel, etc).
They'll have to crush it to make a $2 billion acquihire look reasonable, but it's possible.
> 100% of Windsurf employees will have vesting cliffs waived for their work to date
> 100% of Windsurf employees will receive fully accelerated vesting for their work to date
This sounds like a happy ending for the employees of Windsurf and a good deal for Cognition
For those brief 2 weeks, Windsurf felt like the SOTA tool. Crazy how the winds change.
The "world-class GTM" is a joke.
On the other hand, I can imagine the execs taking Google golden handcuffs while trying to close the Cognition deal so the employees are made whole or maybe even on better terms than if they all went to Google.
> This transaction is structured so that 100% of Windsurf employees will participate financially. They will also have all vesting cliffs waived and will receive fully accelerated vesting for their work to date.
All right, cancelled.
First, OpenAI wanted to acquire Windsurf. Terrific move! Win-win for OpenAI (who needs more AI product) and Windsurf (for the deal price). But this fell apart because Windsurf didn't want the IP to go to Microsoft (which imo should not have been not a big deal, especially if you knew what would have happened next). Big loss for all parties for this to have fallen apart.
My biggest question still is why not continue on as an independent company? Perhaps losing access to Claude doomed signups; perhaps employees/investors had a taste of an exit and still wanted it; perhaps due to fiduciary duty to maximize returns; perhaps their growth stalled due to the announcement? In any case, the founders got a similarly equivalent deal from Google, and were arguably wise to pursue it.
But Google's Corp Dev team here is the most maddening. Why not fully acquire the entire company, instead of doing the same "acquihire and license" deal that was done to Character AI, Adept, Scale, etc.? Risk of FTC antitrust review is a thing, but Google's not even competitive in the coding market, so I doubt there is a review (though I do hear that all acquisitions by large tech companies these days are reviewed by default). If there's anyone to blame in this situation, it's the FTC and Google for pursuing this strategy, instead of a full acquisition. Win-win for Google (for the team) and Windsurf (for getting a similar acquisition price, but liquid!).
Imo, the founders did a good job ensuring that close to the $3B acquisition price was reflected in the $2.5B Google deal--all existing investors and vested employee/equity holders are paid out; the company also retained $100M which was suspiciously similar to the amount needed to pay out all unvested employee/equity holders [1]. So theoretically the remaining company could pay accelerate vesting, then pay out the cash to their remaining employees, and then shut down, to give everyone the same exit as an acquisition, or better. This might have been the best scenario, because the brand damage to Windsurf as an IDE that happened over the weekend was pretty close to unrecoverable for them as an independent company.
But instead, the company leadership decided to field acquisition offers for the remaining company and IP, and got one from Cognition. (I'm actually surprised this acquisition isn't under FTC review; it's more plainly an agentic coding company acquiring a competitor agentic coding company). In taking the offer, it reinforces that the Windsurf IDE will continue to exist, that they have a R&D team backing the IDE again, and can marry Windsurf's enterprise sales chops with Cognition's product [3]. Win-win for both Cognition and Windsurf.
So overall, win-win-win all around, except for OpenAI, Varun's public reputation (imo, undeserved), and startups hiring employees (who might think they might not get a proper exit) [2].
[1] https://x.com/haridigresses/status/1944406541064433848
[2] https://stratechery.com/2025/google-and-windsurf-stinky-deal...
[3] https://x.com/russelljkaplan/status/1944845868273709520
My name is Devin; it has been for many decades now. I'm embarrassed to see you've named your product after me. It has already prompted uncomfortable jokes at my expense, and I'm sure there will be more. I now have newfound empathy for people named Alexa.
For instance, people have made jokes about my name in interviews, and it's embarrassing for me, and thus awkward for everyone, and awkward interactions make it objectively less likely that I will get job offers.
I don't think any product should be named after people. Please change the name of Devin.