Days after AI coding startup Windsurf announced that it’s being acquired by Cognition, Windsurf exec Jeff Wang took to X to offer more details about the drama and uncertainty around the deal.
Windsurf was previously reported to be in acquisition talks with OpenAI, but that deal fell apart, with Google DeepMind instead hiring the startup’s CEO Varun Mohan, co-founder Douglas Chen, and some of its top researchers. Google would reportedly license Windsurf’s technology as part of the $2.4 billion deal — but not take an equity stake in the company.
This looked like the latest in the trend of “reverse acquihires,” in which large tech companies seek to avoid antitrust scrutiny by hiring key startup team members and licensing their technology, rather than acquiring startups outright.
But what happens to the startups and the employees who get left behind? As we discussed on the latest episode of Equity, one startup founder compared the departing Windsurf executives to a captain abandoning his crew on a sinking ship.
Wang, who had been Windsurf’s head of business, became the company’s interim CEO after Mohan’s departure. In his post on X, he offered some sympathy to Mohan and Chen, who he described as “great founders” in a situation that “must have been difficult for them as well.”
Still, Wang recounted an all-hands meeting on Friday, June 11, where most team members were expecting to hear about the OpenAI acquisition. Instead, he had to share the news about the Google deal and resulting departures.
“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.”
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In Wang’s view, although the company “had lost some great people and taken a serious blow to morale,” it still had “all of our IP, product, and strong talent including an excellent [go-to-market] machine.” So Windsurf could still try to raise more money, sell, or just keep going.
That evening, however, 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 launched right into …