Cognition AI, the makers of "Devin" and recent acquirers of Windsurf, raised recently at a $10B valuation [1]. This is about the same valuation as Cursor, which is the fastest growing AI consumer app in the world, with $500MM ARR, beloved by many programmers.

Meanwhile Devin launched with an immediate scandal and continues to have poor reputation. It is not used by anyone I know, seems to be targeted at enterprise, and has announced a single-digit number of deals with companies. Something makes me think they probably do not have $500MM ARR or anywhere close. They have no background in ML, hiring only contest programmers. So how are they raising at much higher valuations than any other company in this space with much less of a track record? Is it possible they are a great behemoth behind the scenes?

For investors, how do they expect to make their money back? Could Google or some other company buy Cognition at $10B, or $20B, or even $5B? Are there strong clauses that protect investors in these situations? How can they possibly not lose a bunch of money here?

[1] https://www.wsj.com/articles/cognition-cinches-about-500-million-to-advance-ai-code-generation-business-f65f71a9