Cognition AI in talks at $25B as AI coding race intensifies after SpaceX-Cursor deal
What’s the deal? Cognition AI, the maker of Devin — billed as the world’s first AI software engineer — is in early talks to raise a new round at a valuation of approximately $25B, according to Bloomberg. The company aims to raise hundreds of millions of dollars or more. Terms are still being negotiated and could change.
The potential round would more than double Cognition’s valuation from the $10.2B it achieved in September 2025, when it raised $400M led by Founders Fund. Other investors include Khosla Ventures and AvenirDealroom has a profile for this one. Try Dealroom →.
Why now? The catalyst is clear: SpaceX’s announcement on 21 April 2026 of an agreement to acquire rival coding company Cursor for $60B. While Cognition’s funding talks started before that news, the deal triggered a fresh wave of investor interest. Cognition president Russell KaplanDealroom has a profile for this one. Try Dealroom → said on X: “The more startups in a category that defect from independent competition by selling to a lab, the stronger the remaining ones become.”
Cognition has grown at a remarkable pace since its founding in late 2023 by Scott WuDealroom has a profile for this one. Try Dealroom →, Walden YanDealroom has a profile for this one. Try Dealroom →, and Steven HaoDealroom has a profile for this one. Try Dealroom →. Annual recurring revenue went from $1M in September 2024 to $73M by June 2025, then more than doubled again after the company acquired the remaining assets of Windsurf in July 2025 — a deal that came after Google hired Windsurf’s co-founders. Customers include Anduril IndustriesDealroom has a profile for this one. Try Dealroom → and Microsoft.
What could go wrong? The $25B valuation is not confirmed — it is based on early talks that may not close at that level. AI coding is one of the most competitive categories in technology. OpenAI and AnthropicDealroom has a profile for this one. Try Dealroom → are both building coding tools and have significantly larger model development budgets. The frontier model makers can bundle coding capabilities into broader offerings, making it harder for pure-play coding startups to maintain pricing power.
Cognition’s “autonomous engineer” positioning with Devin is ambitious but also sets a high bar. Autonomous code generation still produces errors that require human review, and enterprise adoption depends on trust in the output quality. The gap between demo and production-grade reliability remains significant.
The signal: The AI coding market is repricing in real time. Cursor at $60B, Cognition at $25B — these numbers would have been unthinkable two years ago for developer tools companies. What’s driving it is the realisation that AI-powered coding is not a feature but a platform shift, one that could reshape how all software is built.
The SpaceX-Cursor deal is acting as a pricing anchor for the entire category. Every remaining independent coding startup benefits from the scarcity premium: one fewer competitor, and a $60B reference point that makes $25B look reasonable by comparison. Cognition’s revenue trajectory — from $1M to well over $100M ARR in roughly 18 months — gives it the growth story to justify the multiple.
Sources:
Bloomberg
TechFundingNews
Pulse 2.0
Russell Kaplan, X post
Image credit:
Cognition
J.V.
