Big Tech just Legalized Startup Theft

Windsurf announced a $3B deal with OpenAI.

Windsurf announced a $3B deal with OpenAI. Out of nowhere, the founder + top researchers joined Google in a$ 2.4B acqui-hire. Now, the rest of the team is being absorbed by Cognition, the creators of Devin.

There's so much to unpack about this.

In AI, individuals > institutions. AI's biggest promise is leverage (lower marginal cost of execution), so judgment and taste become infinitely more important.

Reverse-acquihires (like this one, or Meta's $30B Scale AI deal) screw over employees. Big Tech cherry-picks founders, licenses the IP, and abandons the rest of the team. Why would rational talent join startups if they don't get any of the upside?

Why do investors allow this? Inflection AI investors made < 1.5x returns on Microsoft's $650M deal. Character.AI (Google$ 2.7B), Adept, and Covariant (both Amazon) likely delivered similar mediocre returns. The answer is simple: there's nothing to approve - it's not technically an acquisition.

Equity has Become a Participation Trophy

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