Windsurf's up! But where's it headed?

Author

Alex Wilhelm
July 14, 2025 • Estimated Reading Time: 7 minutes

Top News

  • The Windsurf story just gets weirder: Last Friday, OpenAI’s period of exclusivity with the AI coding startup Windsurf lapsed, and Google swooped in with $2.4 billion to snap up the founders and key researchers. Still, the product and company themselves were left behind. After a weekend brouhaha about vesting, payouts, and who is really taking on startup risk, Cognition AI bought what was left of Windsurf today, absorbing the rest of the somewhat-stranded team in the process. Call it a win for all parties?

  • Everyone gets a DoD contract: A passel of TWiST500 companies (and Google) have locked down $200 million contracts to bring AI to the Department of Defense. The contracts are good news for the startups, which are generally reported to be unprofitable. (So, cash in the door is a win.) The government space is so attractive that xAI has rolled out an entire product suite to serve it.

  • The GENIUS Act will become law: The Senate-approved GENIUS Act should get a vote this week in the House, where it’s expected to pass. That will bring the legislation to President Trump’s desk, where it will likely get signed. Stablecoin fans, this is just about the best news you could have hoped for. What else might the crypto world have dreamed up? How about a bill expanding crypto-friendly regulation, or a bill that would ban the American central bank from issuing its own digital currency? Yep, those bills should get votes, too. Welcome to Crypto Week!

TWiST500

Today, Jason and I kicked off by the show by watching a viral TikTok that allegedly shows an arsonist being caught and ultimately arrested for starting a fire in LA’s popular walking/hiking spot, Runyon Canyon. In case you are wondering what are those two on about, I thought this was a startup show, worry not: There’s a startup angle.

There are two TWiST500 companies currently working on fighting wildfires:

  • Pano AI: Which uses cameras and smart software to locate remote fires, then files reports with authorities before they can spread.

  • Dryad: Which uses a fleet of IoT sensors to locate, and drones to combat, wildfires.

There’s an old joke in journalism about finding the x angle, where ‘x’ is whatever your beat is. We’re glad to continue the tradition here at TWiST. Jokes aside, Pano recently raised a huge round. As the planet warms, we’re going to need the ability to nip wildfires in the bud or else risk collapsing the global insurance market.

Capping up a busy Monday, Amazon has introduced Kiro, a new agentic coding IDE that includes tools that turn “vibe coding “into something more rigorous. It’s a SaaS product that, if you didn’t know better, you would not know was borne from the AWS team. Let’s see how the TWiST500 coding shops perform with yet another competitor jamming its head into their market. — Alex

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This Week in Startups

E2150: On TWiST Friday, Jason and Alex consider just how xAI’s Grok 4 leapfrogged OpenAI, Google and others to become the top-ranked AI model (of the moment, at least). Plus why some AI startups are still raising their prices, even as the cost of running LLMs drops considerably. We’ve also got Ben Seidl of Autolane in the our studio in ATX to talk autonomous commerce and the future of the urban curbside. Check it out!

E2149: It’s a brand-new TWiST, and Jason and Alex are considering all the news that matters to founders and investors. Today that includes Tesla’s plans to introduce Wifi hotspots within their rides, Nvidia’s historic $4 trillion valuation, Perplexity’s slick new AI powered browser bringing the fight to Google’s Chrome, Waymo’s new “teen” accounts, and lots more. Plus Tim Ranzetta stops by to talk about financial education and his nonprofit, Next Gen Personal Finance.

E2148: Jason’s back in Austin, and he and Alex are running down a huge holiday weekend in tech news. Exits are heating up with $67.7B in Q2 activity, QSBS got a major expansion in the Big Beautiful Bill, Robinhood is pushing boundaries with its tokenized SPV innovation, PLUS Jason’s thoughts on Elon Musk’s new “America Party” and a brand new NFL-themed Polymarket.

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LAUNCH Accelerator

Our current Accelerator batch is graduating! Watch 11 strong startups pitch to Jason and our investor-judges. We are livestreaming the event on Monday, July 28th at 12:30 PM PT. Register here.

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Founder University

Applications are open for Founder University Cohort 11, a 12-week remote pre-accelerator program tailored towards navigating early-startup practices, building an MVP, and growing traction. Submit your application at Founder University— Cohort 10 will kick off Summer 2025!

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