Cognition officially acquires Windsurf

👋 Good morning/evening (wherever you are). It’s Monday.

What a wild weekend!

In just a few days, Windsurf went from a $3 billion acquisition target to a company split between two AI giants.

Here’s what happened:

• Varun Mohan (CEO), co-founder Douglas Chen, and the research leads left Windsurf and joined Google, specifically DeepMind’s agentic coding team.

• This happened just after OpenAI’s $3 billion offer expired.

• It’s being described as a reverse-acquihire, meaning Google didn’t buy the company, just hired its top talent.

Here’s how it split:

• Google got the leadership and research brainpower

• Cognition got the product, IP, brand, and the rest of the team (official announcement)

• Windsurf as an independent startup no longer exists

It’s one of the most chaotic acquisition stories in AI so far. A real-time case study in how fast and messy the race for AI talent has become.

OK let’s keep going ↓

🔥 Creative pulse

Check out this 48-second ad for a smartwatch brand that does NOT exist.

Most of the general public would be fooled.

It’s a preview of how easy it will be for companies to quickly test products in the market using AI.

The team behind it even shared all 24 prompts used to make the video.

Watch the video. Posted on LinkedIn.

💡 Here’s what you should know

• xAI launches Grok for Government

  New $200M DoD contract and GSA listing bring Grok 4 and other frontier AI tools to U.S. national security and public sector missions.

• CDAO partners with frontier AI labs for national security

  The Pentagon’s AI office is working with leading model providers to support high-priority defense and intelligence missions.

• Malaysia imposes trade permit rules on U.S.-origin AI chips

  Effective immediately, Malaysia now requires a permit for exporting or transshipping U.S.-origin high-performance AI chips, signaling stricter compliance with global export controls.

• Claude launches tool connector directory

  Claude now connects directly to tools like Notion, Canva, Stripe, and Figma, allowing it to generate responses using real project context instead of starting from scratch.

• Nvidia restarts H20 chip sales in China

  Nvidia announced it will restart sales of its H20 chips in China and introduced a new RTX Pro GPU designed to meet U.S. export regulations.

• Meta is building multi-GW AI superclusters

  Zuckerberg says Meta is launching “Prometheus” in 2026 and scaling “Hyperion” to 5GW, aiming for world-leading compute per researcher.

💰 The numbers

• Trump is preparing to unveil a $70B initiative focused on AI and energy innovation, according to Bloomberg sources.

• SpaceX is investing $2B into xAI, marking a major cross-company bet to help the startup catch up in the AI race.

• Moonvalley raised $84M to scale its AI video tools for Hollywood studios, aiming to transform virtual production workflows.

• Murphy, a Barcelona-based AI debt servicing startup, raised $15M in pre-seed funding led by Northzone to scale its autonomous agent platform and expand globally.

🧠 Thought starters

• Nvidia CEO on whether AI will lead to job losses

• San Francisco rolls out Microsoft’s Copilot AI for 30,000 city workers

😂 Meme of the day

Thanks for reading,

Eddie

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