Inside the Fastest-Growing Category in AI: Scott Wu, CEO of $26B Cognition

0:00Cognition has raised over a billion dollars. First AI software engineer, Devin. Microsoft and Cognition. Cognition and Mercedes-Benz. Goldman Sachs, Mercedes-Benz, Citi, Dell, Santander, NASA, the U.S. Navy, and the U.S. Army. They've raised over 2.5 billion today at a last valuation of 26 billion. In less than three years, you got to 500 million in revenue. That's crazy. Half a billion in revenue in less than three years. Our customers in the last six months or so have also grown their usage in the range of 11 to 12x. Once you've solved AGI, you just take over the entire world, and then there's just one entity that pulls the world.

0:34I just don't think that's the right future for it. There is nothing that humans do that AIs can't do. Maybe you can just have an AI engineer buddy that can just do work for you. But that was the very first moment that we believed it was possible. I think the Abundance Era is real, and I think we'll be like this, yeah.

1:00Devin welcome to sorcery yeah do you get that a lot um yeah yeah yeah like I'll be in the elevator and in my like building and like I'll just come down and people be like are you Devin and then you know like well I'm actually I'm actually not Devin but yes I understand what you're asking me oh gosh damn well Scott welcome to sorcery we are We're in Paris, which is pretty cool. We're here for the RAISE Summit. It's like this huge AI Summit. I think this is like their second or their third year. You're going to be on stage? Yeah, I'll be on stage tomorrow. I just landed an hour ago and came straight here.

1:42Well, it's awesome to have you on. I'm excited to talk through the state of cognition and autonomous coding agents today. It's very pressing. Did you know that? I did, actually, yeah. I mean, I can't even keep up with it at this point. And so, no, things have been going like crazy. I mean, even for us internally, like, one of the craziest things is, obviously, we use a ton of Devin to build Devin. In fact, we almost exclusively use Devin to build Devin at this point. Like, 95 % of the code or something is written by Devin. Really? But the crazy thing is, even in the last six months, you know, if you ask people, oh, like, AI code, yeah, it's been going on for, you know, three, four years now, which is true, it has been.

2:20But even in the last six months, I think the number for us is, like, our total amount of code shipped is roughly 7x in that time. and so it's like the number of PRs we've shipped the amount of code and obviously literal output you know like there's different ways how in terms of how you actually measure the productivity that you get out of it but I think in practice like we're just able to do so much more and get so much more leverage in even this this this period of time like the models just keep getting better I think there's more and more that's been kind of fleshed out I would say with the product experience and so yeah no things are things are flying it's crazy so how do you measure the productivity of it?

2:57Yeah, it's a great question. So a couple of things I'd say on this, first of all, I think obviously literal tokens is just not the right answer. Really? I mean, lots of people talk about that. I think the token, I say the token maximum era lasted from January to May of 2026, roughly. RIP? Yeah, RIP. It was a fun time. But no, I mean, I think we're now at this point where obviously, you know, what you care about is outcomes and like what you're actually delivering. And so, you know, we see how much we're shipping, we see how much we're doing. Obviously, what do we care about is like, you know, where are we getting to with the product?

3:34Like, what are we actually delivering to our customers and our users? And I think that's roughly the same for every business. There's no kind of like secret trick or there's no kind of like easy way out in terms of measuring actual ROI productivity and so on but but a lot of it comes down to just actually looking to each of the outcomes that you're driving and so for us it's you know obviously we have all the KPIs the business that we track and that we kind of follow and you know when we think about our output like a lot of what we think about is obviously it's like you know how quickly are we growing those numbers as opposed to anything that we actually you know look at in terms of tokens or spend or something like that.

4:18Did you ever think you'd be growing this fast? It's a good question. So what I always think about with this is I think on the one hand, I think relative to businesses, and by the way, it's not just us. It's like our customers have seen this where similarly our customers in the last six months or so have also grown their usage in the range of like 11 to 12x of Devin. and the way I'd say it is yeah on the one hand I think you just like think about businesses in the past you think about the growth of all these tech companies in history and obviously it's pretty crazy on the other hand you know when I kind of asked the question like the first principle of the question okay how many people are using coding agents now how much are they using it for how much are they getting out of versus like what do we think they're going to be using and how much of it are they going to be using in three years or something.

5:13I think the rough answer, especially if you look, if we rewind a bit like a year ago, the rough answer a year ago was roughly zero. And the rough answer for two, three years from now is roughly every software engineer in the world and probably a lot more than all just the software engineers because I think a lot more people will be able to produce code and produce products and so on, right? And so then when you take those two points on the curve and you just extrapolate out what has to happen, But, you know, I think there has to be massive adoption, massive growth. I think what that looks like in practice often is like, of course, you know, there's the virality itself.

5:50There's like, you know, there's a ton of great content that I think a lot of different folks are putting out in terms of like educating people and showing people how to use the tools effectively. And then there's, you know, real organizational change that has to happen all over these companies to make that happen. It's insane. Like of all the categories, there was an interview I did way back when with Naveen from Mayfield and he laid out the three fastest growing categories. And I know it's like it's really obviously it's quite easy to kind of forget about these things when you're in it and like when the whole market is moving with it.

6:23But it's insane how fast this new category in less than three years, you got to 500 million in revenue. That's crazy. Half a billion in revenue in less than three years. that's insane yeah no it's i mean it's i think we're very fortunate and i think that the like obviously i mean ai as a whole has moved like crazy in the last few years but like the way that we think about it is like we have to move this fast you know it's it's like if if we frankly if we only 3x year over year or whatever it is you know we'd be we'd be lagging the market right in terms of how fast all this adoption is happening and i think it's i would say it's more a reflection of just how meaningful the technology is.

7:04It's like everybody in enterprise or just building products in general, the hardest part about building any product, selling a product, all that, is just explaining to people why they should care. It's like, hey, I've got this payroll optimization thing. I've got this usage-based billing thing. I've got this whatever. But here's why this is really meaningful. And here's why you should be thinking about this. right the nice thing about this with with you know ai that can write code by itself and build self-driving products for you is you know it's i think it's kind of obvious why you should care right and so a lot of it is is just like figuring out how you solve all the practical problems of like getting the technology there and then getting it out to to people you're at half a billion in revenue and you have customers that entail, I'm going to list them out because these are some pretty big customers so far.

7:58Goldman Sachs, Mercedes-Benz, Citi, Dell, Santander, NASA, the U.S. Navy, and the U.S. Army. And you've raised over$2.5 billion today at a last valuation of$26 billion. I want to go back in time because Cognition played a pretty big role in a redemption story of a company called Windsurf. So can you bring us back to that moment and how M &A has played a role in the growth? Yeah, it's a fun time. I mean, it was all of 11 months ago. But so we... And by the way, it's quite topical because I think recently, you know, there's similar news with Cursor. you know we at the time kind of heard this news roughly around the same time as everyone else that hey this company Windsurf which was building a really great IDE that a lot of folks used individuals companies and so on some of the team was going to Google right and so there was kind of like you know a acqui-hire deal almost where a number of the researchers on the team were going to Google right and there was a company kind of behind that that still had all the customers, that still had a ready-to-go go-to-market team, a lot of the platform engineering, the product itself, all the details there.

9:16But obviously, it kind of like, was trying to figure out what to do. And that was announced that Friday afternoon. And we at Cog, at Cognition, we were talking about that internally. We were kind of joking about it at first, like kind of interesting, like it's there. And then as we actually thought about it seriously more, we were like actually this is really interesting for us because you know if you think about where we're at like you know we've always been focused on obviously you know the research the product itself like really making progress with the agent product um i think as time goes on it's become more and more clear that like the the really good coding ide products you know the tool that you're the the tool that you're kind of like um sitting in and and and like using to look at the code itself versus the agent product which is kind of that almost the engineer that you can delegate you obviously want this to be very hand in hand.

10:03A lot of the same information on understanding your exact code base. Obviously, you want the same knowledge to persist across. A lot of how you even go and do your work and manage assessments is very common. You're looking at the code yourself, and then you figure out there's something you want to go do, and so you hand that off to a remote agent. So, a ton of synergies in the product. Similarly, in terms of go-to-market, Windsurf had amazing enterprise traction already. It had a team that had a lot of expertise in going and selling to these folks and figuring out how to actually deliver. A really, really amazing deployed engineering motion.

10:46All the pieces that you would need, basically. We got in touch with the Windsurf team that evening. It was Friday evening. Then, basically, over the course of that weekend, we worked out the entire acquisition together. So by Monday morning, we had the announcement ready to go. It was a fun announcement, both myself and Jeff, and honestly, our entire team. We all got very little sleep that weekend. But we put everything together. And yeah, it was great that we were able to do that. I mean, I think it made a lot of sense for us as a company. I think it was also obviously a really great team that was just kind of figuring out what to do.

11:21and I think over the last like year there's I remember saying this it's like peanut butter and chocolate honestly for us. It's been a lot of fun and at this point it's like I think the first few months a lot of little details as you can imagine to figure out like some of the same customers or companies you know it's like yeah we had somebody on the cognition side who had a relationship with them. We had somebody on the windsurf side who had a relationship there's tons of stuff to figure out right all the product stuff you know it's like we're talking at the high level about what the synergies are ton of detail involved in actually going and plugging that in and making billing work and thinking about how you actually hand a session off from the local environment to the remote environment and all these other things um and then similarly even like the teams the offices all that you know stuff to figure out but but today i would say it's like um it's all you know it's all one product it's all one kind of clean you know you come to see our office and it's like you wouldn't know at all like okay is this person from the old cognition or the old windsurf or do they join after you know that time and it's kind of like yeah it's it's been it's been really nice in that time this episode is brought to you by brex my favorite you become what you spend on and i refuse to spend my time on work that shouldn't exist expense reports receipt chasing and manual closes, the companies building what's next from Vercel, OpenAI, Anthropic, Granola, and Deepgram all made the same call.

12:48They all run on Brex. Brex is the intelligent finance platform that combines cards, expenses, and banking into a single stack with agentic finance built in. AI agents that handle expenses automatically, enforce policy before spend happens, and close your books in minutes. That's why Sorcery runs on Brex, so I can spend time on building and not busy work. It's time to get Brex AF. Learn more at brex.com slash sorcery. That's B-R-E-X dot com slash S-O-U-R-C-E-R-Y. Bye. What was it like merging the teams together? Yeah. No, that was a real process. And by the way, one of the things that was tricky about that process is cognition at the time was all of 35 or 40 people.

13:36And we had a meaningful business with real traction. We were doing in the range of 70 or 80 million of revenue run rate at the time. But it was a very small team. Windsurf, on the other hand, because it had kind of scaled up go to market and set all that up, it was around 200 people at the time. And so a lot of details to figure out, obviously. And so for a few months, I mean, the immediate day of or week of all of us were just like, okay, let's just like write the ship, you know, let's make sure folks know, you know, customers know that we're going to be there for them. We're going to be shipping.

14:09We're going to be like, you know, taking care of both sides of the product and doing that well, right. And let's just go and deliver. Over the first few months, obviously, a lot of it was just like figuring out how we, how we kind of get into a good state. And then, you know, as with all things, it's kind of like much easier to go build these things and do all this, you know, with, with some time. Um, and so, um, you know, we had a lot of little like kind of like fun off sites, uh, which helped I think for people getting to know each other, ton of strategy sessions, obviously like working out all the details and so on.

14:42And then, um, you know, pretty soon, like at the end of last year, we got to kind of like, uh, uh, we were looking for like a bigger SF office space, obviously, like as soon as possible, just as like a tactical matter. Cause you know, we needed an office that could fit everybody. Right. Um, and so like, uh, But by the end of the last year, we got that office space and then kind of were able to put everyone in one space and all kind of like work together. And those were, I would say, kind of the big milestones that like made things super, super smooth. How did you work through the product integration?

15:15I mean, it was a lot of steps for sure. No, I mean, I think the one way I'd put it is like, you know, not trying to overly force it. And so, you know, for the time being, it was like, there's a Windsurf product, there's a Devon product, both those are great. Let's work on both of those and kind of do the obvious like next steps on each of these things. And then as we kind of had pieces of overlap, just like naturally building them in together. And so it wasn't like, you know, one month later, Windsurf is gone and that's it. You know, it was like over the course of the last year, even we've been building all these things.

15:52And now it's kind of like, you know, Devon Cloud and Devon Desktop are like super, super like nicely paired together. You can start sessions from one and hand them off to the other. You can work with them all in the same systems, whatever. Right. But but but it's much more of a gradual thing. And I think one of the things that was interesting for us was a lot of the users of either product were kind of already naturally looking for the other side, right? And so we had a ton of people, for example, who were on the IDE framework. And obviously, you know, right around this time they were talking about late 25, early 2026 is right around when these like asynchronous agents were really starting to get big.

16:31And so all these folks were thinking about, okay, well, what should my strategy be? and obviously it's great to be able to work with like you know a single team and you know somebody that already like understands your code base and has all the details kind of like figured out and deployed right and so that was nice and then on the reverse side obviously similarly for a lot of folks who were like you know adopting the cloud agent it's very nice to say okay yeah like the local side of it is there too for any of the developers who still want to use the local form factor and who want to have that right and so I think it's kind of like maybe the simple way to put it is like rather than force it and say okay over the next you know 30 days or 60 days like we have to integrate these products is much more of like letting the actual usage and the the new features that we're building the kind of next paradigms that we're getting to like letting those like pull the products together more gradually rather than forcing it how are you getting advised during this were you just making it up as you go or were you like who are you turning to?

17:29It's a good question. A lot of making it up. And I think for us, I mean, it's one of the things about COG, honestly, is like we, and you know, we've talked before about how a lot of our team are former founders. Our first 56 people, I think like 30 of us had founded a company before this, and so obviously a lot of us together were people who liked being ambitious and entrepreneurial and thinking from first principles. But yeah, also, I mean, I think the... No, I mean, it was a real, like, team effort. I specifically remember that weekend there was a point. So there was the initial kind of discussions, which were with, like, myself and Russell from our side and then Jeff and Graham, you know, from the windsurf side.

18:19But then, obviously, as soon as we got past, like, the very first initial discussion, there was a question of, like, okay, but, like, what are we actually going to do? And so then there was, like, every single kind of, like, part of the business. That Saturday was one of my favorite, like, honestly, one of the funnest days of my life. Really? Was, like, and because, you know, we had our kind of, like, you know, technical team. We had Steven and Walden and so on who are, like, you know, engineering product leaders, like my co-founders, going and, like, you know, sitting with their team to understand, okay, what's going on with WindSurf?

18:51What do we do to get out Wave 11? what are the things what are the specific features which we need to make sure deliver on time, the things that we've promised folks that we obviously want to live up to what are the next first steps on how we would start getting towards an integration, similarly on all of the go to market stuff, we had our folks there working with across teams, making that happen there's just kind of a feeling I think for all of us of like we just love figuring this kind of stuff out you know i think sometimes people kind of describe it as like oh like i just want to like build my product and piece and everything else about building a company is you know that's just like i'll put up with it but it's it's not my cup of tea i think for all of us like yeah like you know the experience of building the company is like is a lot of the fun of it and so it's a really fun weekend for us wow yeah i would imagine i'm sure it's something else every week so yeah yeah yeah it's fun i mean yeah we've had all sorts of uh yeah we've had we've had a lot of more fun weeks since that one too and so it's it's always a mess yeah well speaking on the backdrop of m &a with cursor and their deal their 60 billion dollar deal with spacex m &a is floating around and there's all those kinds of like fun stories that are happening but cognition remains independent so much so that you spent Independence Day at DC, in DC.

20:22So why were you guys in DC for Independence Day and what's the DC play here? Yeah, yeah, for sure. No, I mean, it's, look, I think it's like a really, obviously it's a really topical thing right now. And I think especially because code is, I think in some ways, like, you know, the most kind of like mature vertical. I think a lot of folks look to code as kind of like an expectation of what's going to happen in the rest of the industry and all these verticals. And, yeah, I think there's been a narrative out there that, oh, like, in order to win, you have to be a lab yourself or you have to go sell to a lab.

20:56And obviously, like, we've just always believed that because there's a lot of value and a lot of power in being independent. And you see that in how we work. Like, you know, we're completely model neutral. Like, we work with all the different providers. We work with OpenAI, Anthropic, Google, so on and so forth. but also just like in our approach with companies and so, or with all the orgs that we work with. So DC is really exciting for us for a couple reasons. I think one, because frankly, it's like, you talk about places that need software and that have things that they want to build but not enough software engineers to build them.

21:35DC and government in general might perhaps be the single biggest kind of point of that, right? All of these orgs have so many things that, I feel like the one-liner is like, imagine going to the DMV and it actually worked. And why doesn't it work? It's because there's all this archaic software. It's all these crazy processes. It's because the website kind of doesn't really work. Or you're not able to kind of see these things and track all these things in advance. And like, government software doesn't have to be that. All these things can be good. And I think it's like a really important thing for us to work towards.

22:12I think the other thing and the other reason why it's so important to us is, frankly, I think AI itself is just going to be a pretty fundamental policy issue over the next few years. And like you think about the early days of the Internet, for example, and there were all these discussions about, OK, what's going to happen? Are there going to be a handful of corporations that control the entire Internet or whatever? whatever. Obviously, we ended up with the open internet, and now all the businesses of the world are built on the internet. But there will come a day where all the businesses of the world are built on AI.

22:47And I think it's something that we should be thinking about sooner rather than later. And so we wanted to give our thoughts to that conversation as well. It's awesome to see the new admin just embrace technology so much. The amount that they've done in the last year has been incredible. But from your standpoint of being independent, you mentioned a couple of reasons, but why do you think in the long run it's more important for you to build this company as big as you can independently than under another umbrella? Yeah, yeah. No, I mean, I think the... I guess a few things I'd say. I think there's a world that folks sometimes talk about where there's the full recursive superintelligence and then everything is all owned by like a single entity, you know, or maybe there's two entities or something that they're competing, you know, but they have the, and it's like, you know, everything all collapses.

23:47Once you've solved AGI, you just take over the entire world and then there's just like one entity that fills the world. I mean, I just don't think that's the right future for us. And I think AI will get to that level of capabilities and I think we'll see it do even crazier and crazier things. Like, I've always felt that there's, in terms of just pure knowledge work, there is nothing that humans do that AIs can't do, you know, partly because humans are, humans, you know, our brains are just computers, you know, like the AIs are too, right? And it's like, I mean, they're literally called neural networks because they were inspired by how our brains operate.

24:25And so, like, I think we will solve all these problems. But I think we want that to be done in a way that, you know, that people can control their own intelligence, can have access to all these things and so on. And I think more than that, too, I think that it can be done, which is obviously an important part of any mission that you want to bet on. But I think there is a lot of room and I think there is a lot of appetite from everyone out there, individuals and businesses and so on, for truly independent tools that they can use and for things that really innovate at the product and the value layer rather than just the pure intelligence layer.

25:09I mean, so on this topic, Christian Garrett, I asked him for some questions. 137, they're big fans. They talked about you in their interview we just did with them, with Justin Fishner-Wolson. Yeah, Justin and Christian also. They're great. So Christian asks, why do enterprises want third-party providers or open source and won't solely rely on the labs, thus their coding tools? Yeah. Yeah. I mean, I think several reasons. I think first of all, obviously the way enterprises work is they want to have long-term partnerships. And frankly, it's just hard to know what's going to happen in the long term, right?

25:46Like who even is going to have the best model in six months or 12 months or whatever? And I mean, I think that's very reasonable. You know, like you don't want to teach all of your engineers or your entire team how to use one particular suite and one particular product and then find out, oh, actually, it turns out people aren't using this one anymore because everyone says this other one is better or something, right? But I think the other reason that it's important, too, is because, as we said, you know, I think for every company or for every team, like, what they care about is not how many tokens they're using, it's how much value they're driving, right?

26:16And I think it's very important for there to be a player that is going and helping them drive all that value and, like, turning that into reality, right? And I think in practice, it's how you organize your teams, how you think about planning, how you think about specs or design, how you do user research. All of these things should be different in the era of AI. It's not as simple as like, you know, throw the tool over the wall. Here's your chat bot. Try that out. Hopefully, it's good for you. It's like there's a lot of fundamental questions that you have to think through and work through. And these obviously require organizational change.

26:53And so I think from their perspective, they want to work with somebody who's thinking a lot about that, who really understands that, and is excited to go help them with all those details. If you're building what's next in AI, you need to know MongoDB, the database platform developers love and built for the agents you're running. MongoDB stores searches and reasons over your data in real time. with vector search and embeddings from Voyage AI all in the same system. No separate pipelines, no stitching together 10 different tools. It's why 75 % of the Fortune 100 and leading AI-native startups run on MongoDB.

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28:18You can get started today at assemblyai.com slash sorcery and get$50 of free credits to start building voice AI products. That's assemblyai.com slash S-O-U-R-C-E-R-Y. So you're based in Silicon Valley. Yeah. Do you believe the whole six months to singularity thing? What's your take on the whole singularity? Six months is a bit short. Fear-longering. Yeah. I mean, so look, the recursive thing, here's what I'd say. there is obviously some version of the recursive thing which is literally, I mean, I even just said that, like, Devin writes most of the code of Devin. So it's like, you know, on the other hand, I think the question of, you know, whether, you know, whether humans will be rendered irrelevant and all human, like, all science problems and all societal problems will be solved, you know, six months from now with the ultimate intelligence, I don't quite believe that.