Google scuppers $3bn OpenAI deal by buying key technology and developers
Here's What We Know
OpenAI has started buying Windsurf, a startup that was engaged in promising developments in the field of artificial intelligence. The deal was supposed to be worth $3 billion, which is a lot for a startup; at one time, Instagram cost Facebook $1 billion, and it was considered a lot. But the deal is no longer going to happen.
Google made a pirate raid, buying out the key employees of the Windsurf startup for $2.4 billion, along with the CEO and non-exclusive intellectual property rights. That is, for what was the core value of the startup.
Moreover, such tactics are not illegal, and OpenAI will not be able to sue. Bypassing antitrust laws - without an actual takeover, Google keeps this deal within the anti-trust zones. The trend of "acqui-hire" - when you buy brains and zero assets - helps giants avoid regulators.
What is OpenAI's situation?
OpenAI has already faced aggressive competitors: recently, Meta has been actively luring promising AI engineers from the company by offering 100 million contracts. OpenAI CEO Sam Altman publicly called it an "invasion of mercenary agents" and hinted that they were ready to increase payments to retain their team. Now Google has joined this world of sharks. It seems that the unexpected success of OpenAI has led large corporations to follow this small company very closely, quickly intercepting with the "long dollar" everything it shows interest in. Such pressure and the companies' disparate financial capabilities could lead to a serious crisis and eventual takeover of OpenAI by one of the financial giants.
Context and implications
Meta, Microsoft, and Amazon have already used such strategies: Microsoft poached the founder of Inflection, Amazon the Adept team, and Google a year ago CharacterAI.
The FTC under the leadership of Andrew Ferguson continues to investigate the actions of large tech corporations, but has not yet stopped such aqua hires. The million-dollar question: will regulators actively consider informal acquisitions as a threat to competition?
Source: gizmodo.com
