Khosla Criticizes Windsurf Founders for Abandoning Team After Failed OpenAI Deal

The founders of the AI startup Windsurf, Varun Mohan and Douglas Chen, are facing significant backlash after abruptly leaving their team to join Google DeepMind. Just weeks earlier, they had been in negotiations to sell the company to OpenAI for $3 billion, but those talks unexpectedly collapsed. The sudden departure left the remaining Windsurf employees in a state of turmoil, with some expressing financial concerns and others worrying about the company's future. Legendary venture capitalist Vinod Khosla, whose Khosla Ventures is an investor in another AI startup, Cognition, has criticized Mohan and Chen's actions. In a post on X (formerly Twitter), Khosla stated, "Windsurf and others are really bad examples of founders leaving their teams behind and not even sharing the proceeds with their team. I definitely would not work with their founders next time." Khosla's comments come in the wake of ongoing debates within the startup community about the responsibilities and ethics of founders. The criticism was spurred by a podcast clip from "The Twenty Minute VC," where Cognition founder Scott Wu discussed the unwritten rule that founders should "go down with the ship." Wu lamented that this ethos has somewhat eroded over the past year, a sentiment echoed by Khosla. One X user accused Khosla of hypocrisy, given his own controversial past, particularly with the beleaguered WeWork. However, Khosla staunchly defended his stance, arguing that working without trust can lead to unhappiness and expressing empathy for the Windsurf team left behind. He posed a hypothetical question, asking himself whether he would keep the entire proceeds of a lucrative deal or fight for the team's benefit, indicating he would likely choose the latter. Jeff Wang, the former head of business at Windsurf and now the CEO of Cognition, detailed the somber mood during the announcement of the failed OpenAI deal and the founders' departure. He wrote, "The mood was very bleak. Some people were upset about financial outcomes or colleagues leaving, while others were worried about the future. A few were in tears." Despite the challenging circumstances, Wang still commended Mohan and Chen, recognizing their contributions and the difficulty of the situation they faced. The Windsurf episode highlights the complex dynamics within the fast-paced AI startup sector, where high-stakes deals and rapid decision-making can have profound impacts on employee morale and company stability. While Mohan and Chen's move may have seemed advantageous for their careers, it has left a trail of controversy and a critical review from a prominent figure like Khosla. Industry insiders argue that this incident underscores the importance of trust and transparency in leadership, especially in startups where every decision can be a turning point. Trust is paramount, and leaders who abandon their teams without proper consideration may face long-term reputational damage that could hinder future opportunities and collaborations. Windsurf's remaining team, under interim management, quickly sought a solution and struck a deal with Cognition. This move reflects the resilience and adaptability required in the tech industry, as well as the necessity for leaders to prioritize their team's well-being in times of crisis. The drama surrounding Windsurf serves as a cautionary tale for other founders and investors navigating the competitive and often unpredictable landscape of AI innovation. Cognition, now including former Windsurf employees, is poised to benefit from the influx of talent and the renewed focus on ethical leadership. The company is known for its emphasis on creating robust AI systems and fostering a collaborative environment. With Windsurf's setback, Cognition may gain a competitive edge, highlighting the fluid nature of the AI market where one company's loss can be another's gain.