This potential funding round would push Cognition’s valuation past the $10 billion mark—more than doubling its previous $4 billion valuation just months after a March investment led by 8VC, the venture capital firm co-founded by Palantir’s Joe Lonsdale, according to Bloomberg. However, one insider noted that the deal is still in finalization and terms may shift before closing.

The talks follow a series of dramatic moves in the AI coding space. Earlier this month, it was unexpectedly revealed that Windsurf, a competing AI-powered coding startup previously rumored to be in acquisition talks with OpenAI, would be joining Google in a $2.4 billion deal. Just two days later, Cognition announced it had acquired the remaining assets of Windsurf for an undisclosed amount. In a video announcing the partnership, CEO Scott Wu appeared alongside Jeff Wang, the new CEO of Windsurf, stating, “The new Cognition will work faster than ever. We want to redefine how humans and agents work together.”

Cognition, along with investors Founders Fund and Khosla Ventures, did not respond to immediate requests for comment.

Launched in 2023 by three elite programmers—each with Olympiad-level gold medals in coding—Cognition introduced its AI software engineer, Devin, last year amid widespread attention. A demo showcasing Devin’s abilities quickly went viral, though it also sparked skepticism about whether the product was being overhyped. “Software engineering in the real world is just very messy,” Wu told Forbes at the time. Since then, the company has secured enterprise clients such as Ramp, MongoDB, and Nubank.

The broader generative AI coding landscape has seen explosive growth. Anysphere, creator of the popular AI coding tool Cursor, is now considered one of the fastest-growing startups ever, with annualized revenue surpassing $500 million. It was most recently valued at $9.9 billion following a $900 million funding round led by Thrive Capital in June. Meanwhile, Sweden-based Lovable, an AI-driven “vibe coding” platform aimed at non-developers, hit $100 million in annualized revenue within just eight months—reaching the milestone faster than Cursor. At major tech firms, leaders like Google’s Sundar Pichai and Microsoft’s Satya Nadella have reported that over 25% of their internal code is now generated by AI systems.

Last year, Cognition president Russell Kaplan told Forbes that the vision for Devin is to function as “an army of junior engineers,” automating routine development tasks for large organizations. Wu acknowledged the concerns this raises among professional developers. “There really is a lot of fear out there,” he said. “People have a lot of questions about what happens in this new paradigm.”

Iain Martin contributed reporting.

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