Windsurf startup is pushing through chaos after a botched acquisition and team shakeup.
Word broke that Windsurf was in talks to be acquired by OpenAI. That deal collapsed last minute. Instead, the CEO Varun Mohan, co-founder Douglas Chen, and key researchers landed jobs at Google DeepMind. Google agreed to license Windsurf’s tech as part of a $2.4 billion deal—but didn’t buy equity.
This raised eyebrows as another "reverse acquihire," where big tech hires talent and licenses tech to dodge antitrust risks without a full buyout. 
Meanwhile, the rest of the Windsurf team was left in limbo. Jeff Wang, Windsurf’s head of business turned interim CEO after leadership departures, spilled the fallout on X.
Wang described a brutal all-hands on June 11 where the team expected OpenAI news but instead got the Google deal and leadership exit.
"The mood was very bleak," Wang said.
"Some people were upset about financial outcomes or colleagues leaving, while others were worried about the future. A few were in tears, and the Q&A had been understandably hostile."
Despite losing top engineers and morale hitting rock bottom, Wang said Windsurf still held all its IP, product, and a solid go-to-market team. They could still raise funds, sell, or push forward independently.
That night, Windsurf got serious about a deal with Cognition. Wang and Cognition’s Scott Wu and Russell Kaplan jumped into talks over an intense weekend while juggling interest from other acquirers and trying to keep remaining engineers onboard. Wang said the deal was a team and culture fit.
"While they had overinvested in engineering, they had frankly underinvested in GTM and Marketing, and our teams in those functions are nothing short of world class," Wang stated.
"On the other hand, we now were missing a Core Engineering team, and there’s no better group of AI engineers than the lineup Cognition has assembled."
Wang highlighted a key deal win: ensuring every employee gets a payout, cliffs waived, and vesting accelerated on Windsurf equity.
The acquisition signed Monday at 9:30am was shared with the team and then went public shortly after.
Wang told Bloomberg this Friday all-hands was “probably the worst day of 250 people’s lives,” followed by Monday being “probably the best day.”
Windsurf is now under Cognition, but the startup’s turbulence is a stark reminder of the human cost behind tech’s shifting acquisition tactics.
