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Cognition Acquires Windsurf in Weekend Sprint to Secure Employee Payouts

The acquisition follows a collapsed $3 billion OpenAI bid after founders joined Google DeepMind.

Varun Mohan has come under fire for 'cashing out' of Windsurf while abandoning his team
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Overview

  • Interim CEO Jeff Wang led weekend negotiations that produced a letter of intent Friday and a finalized acquisition by Monday morning.
  • Cognition’s purchase guarantees payouts for every Windsurf employee, voids vesting cliffs and accelerates equity vesting for existing shares.
  • Co-founders Varun Mohan and Douglas Chen departed to Google DeepMind under a $2.4 billion reverse acqui-hire licensing deal without transferring company equity.
  • Industry players are increasingly using licensing and reverse acqui-hire structures to avoid regulatory hurdles and swiftly secure AI talent and technology.
  • Investors and executives warn that these split-deal frameworks could undermine the Silicon Valley social contract and chill future startup hiring incentives.