Peter Thiel-backed artificial intelligence startup Cognition AI is reportedly in early discussions with investors about a new funding round that could value the company at $40 billion or more, underscoring the intense investor appetite for companies building AI-powered software development tools.
The potential valuation would represent an increase of more than 50% from Cognition’s most recent financing. Less than three months ago, the company raised approximately $1 billion at a $26 billion valuation, according to a Bloomberg News report.
The new discussions come as Cognition’s business is expanding rapidly. The company’s annualized revenue run rate is approaching $1 billion, roughly twice the level reported around the time of its previous financing, Bloomberg said.
Cognition has emerged as one of the most closely watched startups in the increasingly competitive market for AI coding tools. Its flagship product, Devin, is an autonomous software engineering agent designed to perform development tasks that traditionally require human programmers, including writing and debugging code and completing broader engineering projects.
Enterprise adoption of Devin has helped fuel Cognition’s growth. Customers include Goldman Sachs, Mercedes-Benz and several U.S. government agencies, giving the startup a foothold among large organizations looking to incorporate generative AI into software development workflows.
A $40 billion financing would also highlight the extraordinary pace at which valuations for leading AI startups have climbed as investors compete for exposure to companies demonstrating substantial revenue growth.
Cognition has attracted backing from prominent technology investors, including billionaire entrepreneur and venture capitalist Peter Thiel. The company was founded in 2023 and gained widespread attention after unveiling Devin in 2024 as what it described as an AI software engineer capable of independently handling complex coding assignments.
The reported fundraising talks remain at an early stage, and the ultimate size, participants, and valuation of any financing could change.
Still, the discussions illustrate how AI coding has become one of the technology sector’s most closely watched markets. Developers and enterprises are increasingly adopting AI systems that can generate code, troubleshoot software and automate portions of the engineering process, creating a potentially large market for companies able to turn those capabilities into enterprise products.
If Cognition completes a funding round at a valuation of at least $40 billion, it would mark another significant step in the startup’s rapid ascent—and provide another indication that investors remain willing to place substantial bets on AI companies showing fast commercial adoption and revenue growth.
