July 14 (Reuters) - Artificial intelligence startup

Cognition AI on Monday agreed to acquire Windsurf, an integrated

development environment platform, strengthening its position in

the rapidly evolving enterprise software market.

The deal follows Google's $2.4 billion deal with Windsurf

last week aimed at acquiring top talent and securing licensing

rights to its technology.

The deal with Google marks a win for Windsurf's backers, who

have raised $243 million from investors including Kleiner

Perkins, Greenoaks, and General Catalyst, and was last valued at

$1.25 billion one year ago, according to PitchBook.

The move reflects a broader trend among technology giants

such as Alphabet and Meta, which are making bold,

high-value acquisitions and offering lucrative compensation

packages to secure leading industry talent amid intensifying

competition in the AI sector.

The deal with Cognition covers Windsurf's intellectual

property, product line, brand, and business operations, as well

as its highly regarded engineering, product, and go-to-market

teams.

While the financial terms of the deal were not disclosed,

Windsurf brings with it $82 million in annual recurring revenue

and a customer base of more than 350 enterprises.

"Among all the teams in the AI space, Cognition was

literally the one we have respected the most, and they are a

perfect fit to bring Windsurf to the next phase," Jeff Wang,

Windsurf's interim chief executive officer, said in an email to

employees.

In the immediate term, Windsurf will continue to operate

independently, with Cognition pledging significant investment to

integrate Windsurf's technology and unique assets into its own

product suite, including its flagship autonomous agent, Devin.

Earlier, Windsurf had been engaged in months-long

discussions with OpenAI regarding a potential acquisition that

could have valued the company at $3 billion, sources familiar

with the matter told Reuters in June.