Cognition in talks to raise funds at $40 billion valuation

AI coding startup Cognition is reportedly in discussions with investors to secure a new funding round at a valuation of up to $40 billion, according to sources cited by Bloomberg. The potential deal would mark a significant escalation for the company, which raised $1 billion in May at a $26 billion valuation.

The proposed $40 billion price tag is contingent on the company achieving a $1 billion annualised revenue run rate. This target represents a substantial increase from the $492 million annualised revenue run rate confirmed by CEO Scott Wu in May. The valuation jump underscores the market’s appetite for enterprise-grade artificial intelligence tools, provided they can demonstrate rapid revenue scaling.

Wu has stated that enterprise usage of the Devin agent has grown by 50 per cent month-on-month for the past six months. This growth trajectory appears to be driven by the tool’s specific positioning in the market. Rather than replacing human programmers, Devin is designed to handle long-tail grunt work, such as updating legacy software systems or migrating applications between platforms.

The company’s client roster includes major global organisations, including Mercedes-Benz, NASA, and Goldman Sachs. These high-profile adoptions suggest that Cognition has successfully penetrated sectors where software maintenance and modernisation are critical operational priorities.

Cognition’s rapid ascent follows its emergence as a key player in the generative AI sector. Wu, a noted programmer, has emphasised that the agent is a utility for tedious technical tasks rather than a substitute for human engineering talent. The company’s ability to attract top-tier enterprise clients has been a central pillar of its growth strategy since its inception.

As of 12 August 2026, the funding round remains in the discussion phase and has not been formally closed. The $40 billion valuation is based on the hypothetical revenue target rather than currently confirmed figures. Investors will likely scrutinise whether the company can sustain its current growth momentum to meet the $1 billion annualised revenue benchmark.