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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/p>\n
No engineer left behind. On Friday night, Google said it would hire the top talent of a developer of artificial intelligence tools called Windsurf, including its chief executive. As part of the $2.4bn package, it will also license Windsurf\u2019s technology. Welcome to Silicon Valley, where the line between acquiring people and acquiring businesses gets ever fuzzier.<\/p>\n
While tech giants are getting a warmer reception from US President Donald Trump\u2019s administration than they did under Joe Biden, making acquisitions is still far from easy. While big deals still happen \u2014 Google\u2019s $32bn purchase of cloud security company Wiz, for example \u2014 buying whole companies comes with high prices and the risk of antitrust hassle.<\/p>\n
That bolsters the appeal of the so-called acqui-hire: striking a deal with a company to get at its people. Another example is Facebook owner Meta Platforms\u2019 $14bn tie-up with Scale AI, a business that labels data for use in large language models. For its money it gets founder Alexandr Wang, who also becomes Meta\u2019s chief AI officer, as well as half the company.<\/p>\n
Such deals make sense in an industry that believes in \u201cwinner take all\u201d. The likes of Mark Zuckerberg and Google chief executive Sundar Pichai subscribe to the idea that in AI, disproportionate spoils will flow to a very small number of game-changers. Professional sports, financial services and corporate law have similar qualities \u2014 but tech has taken this to a new extreme.<\/p>\n
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That will create windfalls for high-end computing labour. It may also create cultural issues for acquirers as they integrate new talent that colleagues know came at a very high price. But ultimately, the benefits of taking key people out of the job market probably outweigh those risks. In Windsurf\u2019s case, OpenAI had also been circling, but had failed to secure a deal.<\/p>\n
What of employees who do not follow their leaders on to the gravy train? They may not be totally bereft. On Monday, Windsurf said Cognition, another Silicon Valley player, would buy the whole company. Remaining Windsurf employees\u2019 existing equity grants will vest immediately.<\/p>\n
There is a glum note to this for tech workforces more broadly. Faced with the cost of talent and building AI<\/a> data centres, big tech has actually been on a lay-off spree. Meta and Google parent Alphabet both have fewer employees than they did at the end of 2022. The AI they are developing now will further diminish staffing needs. Anthropic CEO Dario Amodei reckons AI will write \u201cessentially all\u201d code a year from now.<\/p>\n In the meantime, the trend augurs a busy period for Silicon Valley luminaries as companies try to navigate the gold rush. And for potential sellers, the notional exit deal has now morphed into two: one price for the sought-after people, and another for the company they leave behind.<\/p>\n