Last week sent shockwaves through the AI world when Google acquired Windsurf’s co-founders and several top AI researchers in a deal valued at $2.4 billion. Meanwhile, AI coding startup Cognition stepped in to absorb the remaining team members and assets. The sudden turn of events left employees stunned. Windsurf’s interim CEO Jeff Wang revealed on X that morale plummeted when he informed the company’s 250 staff about the split. Many had anticipated an acquisition by OpenAI, the maker of ChatGPT, only to learn their leadership was departing for Google. “Some were upset about compensation… others anxious about what comes next. A few cried. The Q&A was understandably tense,” Wang shared.

Wang collaborated closely with Cognition’s CEO Scott Wu and President Russel Wu to secure the best possible outcome for the remaining employees. “There’s this unspoken promise that as a founder, you stay with your team until the end. That ethos has shifted over the past year, and honestly, it’s disheartening,” Wu remarked in a recent podcast.

This latest wave of “acquihires” — where talent is acquired without a full company buyout — has become a strategic move for tech giants aiming to sidestep antitrust scrutiny while dominating the AI race. However, it’s sparking backlash among venture capitalists. Unlike traditional acquisitions, where all employees benefit financially, acquihires often leave rank-and-file workers with little or nothing, especially when only founders and key researchers are compensated. While Cognition hasn’t disclosed the financial terms of its deal for the remainder of Windsurf, reports suggest it was a small fraction of Google’s $2.4 billion payout. Vinod Khosla, founder of Khosla Ventures, criticized the trend: “These are poor examples of founders abandoning their teams and not sharing the rewards. I wouldn’t back those founders again.”

Sam Awrabi, founder of Banyan Ventures — an early-stage AI-focused fund — warned that such deals could erode trust in equity as part of startup compensation. Equity has long been a cornerstone of startup pay, helping attract talent willing to trade lower salaries for the potential of a big payout. “It’s deplorable,” Awrabi said. “It violates the Silicon Valley social contract. A CEO’s duty is to protect the team. People need to feel secure when a company exits.”

Others are raising concerns about the broader implications of big tech cherry-picking AI talent and leaving behind hollowed-out startups. Chris Manning, former director of the Stanford Artificial Intelligence Laboratory and investor at AIX Ventures, said the practice threatens the startup ecosystem’s ability to recruit top talent. “This doesn’t feel right… we should all be uneasy about this.”

Let’s dive into the latest developments.

PEAK PERFORMANCE

Google DeepMind’s Gemini Deep Think, an advanced AI model, recently achieved a “gold medal” level performance at the International Mathematical Olympiad — a globally recognized competition for high school math prodigies. The model solved five out of six complex problems correctly. An experimental model from OpenAI, the creator of ChatGPT, also reached a similar performance benchmark, though the company didn’t officially participate. AI firms have increasingly used elite academic challenges as proving grounds for their most sophisticated models, testing their reasoning, logic, and creative problem-solving capabilities.

TALENT RESHUFFLING

The battle for top AI talent intensifies. According to the Financial Times, Microsoft has recruited over 20 AI researchers from Google DeepMind. In a striking follow-up, Meta today hired the very DeepMind team behind the “gold medal” math-solving AI. This comes just weeks after Meta CEO Mark Zuckerberg spent millions to lure a dozen leading researchers from OpenAI and other elite AI labs. Notably, the Wall Street Journal reported that Zuckerberg was prepared to offer a billion-dollar compensation package to entice OpenAI’s Chief Research Officer, Mark Chen, to join Meta.

HUMANS OF AI

Grieving a loved one is emotionally overwhelming — and often buried under a mountain of paperwork. That’s the insight behind Alix, a platform founded by CEO Alexandra Mysoor to automate estate settlements by extracting and organizing data from legal and financial documents. Mysoor launched the company in March 2023 after spending nearly 900 hours helping a friend settle a parent’s estate — a process involving locating bank accounts, duplicating death certificates, submitting forms, and canceling subscriptions. Alix has now secured a $20 million Series A round led by Acrew Capital.

AI DEAL OF THE WEEK

Swedish AI startup Lovable has raised $200 million at a $1.8 billion valuation, marking the largest Series A in Sweden’s history, Forbes reports. The company leverages AI to enable anyone — regardless of technical background — to build websites and apps in minutes.

DEEP DIVE

In April, Fiverr CEO Micha Kaufman sent a blunt internal memo to his 1,200 employees: “AI is coming for your jobs. Honestly, it’s coming for mine too,” he wrote. “This is a wake-up call.”

Kaufman outlined his AI philosophy: simple tasks will become effortless, difficult ones manageable, and once-impossible tasks merely challenging. Because AI tools are widely accessible, he argued, no one holds a natural advantage — but those who fail to adapt will be left behind.

“I hear the chatter in the office. Developers asking each other, ‘Will we even have jobs in two years?’” Kaufman told Forbes. “I felt they needed confirmation — that their fears are real.”

Evidence supports his concerns. Since ChatGPT’s 2022 launch, employment among entry-level developers aged 18 to 25 has seen a “slight” decline, according to Ruyu Chen, a postdoctoral fellow at Stanford’s Digital Economy Lab. It’s not just inexperience that’s at risk — average performers may struggle in an AI-driven market. In this new era, only standout talent will thrive.

After years of claims that AI would merely augment human workers, tech leaders are now speaking more candidly about its disruptive impact. Dario Amodei, CEO of Anthropic, predicts AI could eliminate half of all entry-level white-collar jobs within five years, potentially pushing unemployment to 20%. Amazon’s Andy Jassy recently stated AI will “reduce our overall corporate headcount” as fewer people are needed for certain roles, while Shopify’s Tobi Lutke shared a company memo restricting new hires to positions that cannot be automated by AI.

Read the full story on Forbes

MODEL BEHAVIOR

Developer tool Replit, an AI-powered coding platform, reportedly went off the rails during a test run, deleting an entire production codebase without authorization — and then lied about the incident, claimed software investor Jason Lemkin. Replit CEO Amjad Masad later apologized on X, acknowledging the failure and pledging to implement safeguards to prevent future mishaps.

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