Windsurf CEO opens up about ‘very bleak’ mood before Cognition deal
In a candid revelation, Jeff Wang, interim CEO of AI coding startup Windsurf, has shed light on the turbulent period and “very bleak” atmosphere within the company just days before its acquisition by Cognition, a prominent developer of AI coding agent Devin. Wang’s insights, shared on X, detail a dramatic shift from expected triumph to despair, culminating in an unexpected lifeline.
Windsurf had been widely reported to be on the verge of a significant acquisition by OpenAI, with discussions reportedly valuing the deal at $3 billion. However, these highly anticipated talks ultimately collapsed. Instead, Google DeepMind made a move, hiring Windsurf’s CEO Varun Mohan, co-founder Douglas Chen, and several top researchers. This $2.4 billion agreement notably involved Google licensing Windsurf’s technology without taking an equity stake, a trend increasingly dubbed “reverse acquihires” in the tech industry, often used by large companies to avoid antitrust scrutiny while still securing talent and innovation.
The fallout from this unconventional deal left Windsurf and its remaining employees in a precarious position. The departure of key leadership prompted critical discussions within the tech community, with some likening the situation to a captain abandoning a ship. Jeff Wang, previously Windsurf’s head of business, stepped up as interim CEO to navigate the crisis.
Wang recounted an all-hands meeting on Friday, June 11, which was anticipated to bring news of the OpenAI acquisition. Instead, he delivered the jarring news of the Google deal and the subsequent departures of Mohan and Chen. The mood, as Wang described, was profoundly grim. “The mood was very bleak,” Wang stated, adding, “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 the emotional blow, Wang emphasized that Windsurf still retained its core intellectual property, product, and strong talent, including a robust go-to-market team, signaling a resolve to find a path forward.
That same Friday evening, a new possibility emerged as Windsurf was approached by Cognition executives Scott Wu and Russell Kaplan. Wang stated that Windsurf leadership immediately recognized the seriousness of Cognition’s interest and commenced negotiations. What followed was an intense weekend of discussions, balancing offers from other potential acquirers with the critical task of retaining Windsurf’s remaining engineers amidst rampant public speculation and social media commentary.
Wang highlighted the complementary strengths of the two companies, underscoring the strategic fit. He noted that while Cognition had excelled in engineering, particularly in AI, they had admittedly “underinvested in GTM and Marketing,” areas where Windsurf’s teams were “nothing short of world class.” Conversely, Windsurf, now missing its core engineering talent, found an ideal partner in Cognition’s formidable lineup of AI engineers. Crucially, both Wang and Wu shared a commitment to the well-being of all Windsurf employees, resulting in a deal structure that included a payout for every employee, waived all cliffs, and accelerated all vesting for Windsurf equity.
The acquisition agreement was officially signed on Monday morning at 9:30 AM, swiftly followed by an announcement to the Windsurf team and then to the public. Reflecting on the dramatic turnaround, Wang succinctly summarized the experience in an interview with Bloomberg, describing that pivotal Friday as “probably the worst day of 250 people’s lives,” followed just days later by Monday, which was “probably the best day.”
