Since the middle of last year, there have been at least three major AI “acqui-hires” in Silicon Valley. Meta invested more than $14 billion in Scale AI and brought on its CEO, Alexandr Wang; Google spent a cool $2.4 billion to license Windsurf’s technology and fold its cofounders and research teams into DeepMind; and Nvidia wagered $20 billion on Groq’s inference technology and hired its CEO and other staffers.
The frontier AI labs, meanwhile, have been playing a high stakes and seemingly never-ending game of talent musical chairs. The latest reshuffle began three weeks ago, when OpenAI announced it was rehiring several researchers who had departed less than two years earlier to join Mira Murati’s startup, Thinking Machines. At the same time, Anthropic, which was itself founded by former OpenAI staffers, has been poaching talent from the ChatGPT maker. OpenAI, in turn, just hired a former Anthropic safety researcher to be its “head of preparedness.”
The hiring churn happening in Silicon Valley represents the “great unbundling” of the tech startup, as Dave Munichiello, an investor at GV, put it. In earlier eras, tech founders and their first employees often stayed onboard until either the lights went out or there was a major liquidity event. But in today’s market, where generative AI startups are growing rapidly, equipped with plenty of capital, and prized especially for the strength of their research talent, “you invest in a startup knowing it could be broken up,” Munichiello told me.
Early founders and researchers at the buzziest AI startups are bouncing around to different companies for a range of reasons. A big incentive for many, of course, is money. Last year Meta was reportedly offering top AI researchers compensation packages in the tens or hundreds of millions of dollars, offering them not just access to cutting-edge computing resources but also … generational wealth.
But it’s not all about getting rich. Broader cultural shifts that rocked the tech industry in recent years have made some workers worried about committing to one company or institution for too long, says Sayash Kapoor, a computer science researcher at Princeton University and a senior fellow at Mozilla. Employers used to safely assume that workers would stay at least until the four-year mark when their stock options were typically scheduled to vest. In the high-minded era of the 2000s and 2010s, plenty of early cofounders and employees also sincerely believed in the stated missions of their companies and wanted to be there to help achieve them.
Now, Kapoor says, “people understand the limitations of the institutions they’re working in, and founders are more pragmatic.” The founders of Windsurf, for example, may have calculated their impact could be larger at a place like Google that has lots of resources, Kapoor says. He adds that a similar shift is happening within academia. Over the past five years, Kapoor says, he’s seen more PhD researchers leave their computer-science doctoral programs to take jobs in industry. There are higher opportunity costs associated with staying in one place at a time when AI innovation is rapidly accelerating, he says.
Investors, wary of becoming collateral damage in the AI talent wars, are taking steps to protect themselves. Max Gazor, the founder of Striker Venture Partners, says his team is vetting founding teams “for chemistry and cohesion more than ever.” Gazor says it’s also increasingly common for deals to include “protective provisions that require board consent for material IP licensing or similar scenarios.”
Gazor notes that some of the biggest acqui-hire deals that have happened recently involved startups founded long before the current generative AI boom. Scale AI, for example, was founded in 2016, a time when the kind of deal Wang negotiated with Meta would have been unfathomable to many. Now, however, these potential outcomes might be considered in early term sheets and “constructively managed,” Gazor explains.
I asked my colleague Steven Levy, who has been reporting on Silicon Valley for decades, what he thought of this culture shift underway. He pointed out that working for an AI startup over the past few years has offered a lot of founders and top researchers an accelerated experience.
“Working for an AI startup for one year is equivalent to working for a startup for five years in a different era of tech,” Levy said. Teams can now launch brand-new products used by millions of people in a relatively short span of time, which leaves workers feeling like they’ve honed their skills enough to move on to a bigger challenge.
This generation of tech workers also has a wider range of opportunities to choose from than their predecessors did. Decades before Mira Murati’s Thinking Machines Lab was created, there was another startup called Thinking Machines Corporation working on parallel computing and artificial intelligence. One of its earliest employees, Lew Tucker, remembers there being around 50 people there when he joined in 1986, and more than 500 by the time the company went belly up and got acquired by Sun Microsystems in 1996. “Very few people left,” Tucker says. There were no job boards back then, either, he explains. People just “talked their way in.”
Even after tech went mainstream in the 2000’s, plenty of founders and early employees remained loyal to their firms. There were bragging rights that came with rejecting acquisition offers from big, bloated tech companies in favor of remaining committed to the startup cause. The founders and first-ins at companies like Google, Facebook, Airbnb, Stripe, Pinterest, Slack, Notion, and many others stuck around for years and reaped the rewards of their loyalty.
But the tech industry’s halo has dimmed a lot since then. Founders, and their most loyal lieutenants, are trading idealism for pragmatism. AI is moving so fast, and the people developing it are trying to move along with it. There is little time to linger or build reputations slowly before the next opportunity arrives. For now, this generation of AI talent can name its price. The question is: at what cost?
Additional reporting by Paresh Dave.
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