> Google's deal with Windsurf is structured that way because they likely could not directly acquire, or were not confident that it would have gotten past the antitrust

I've been following OpenAI, Google, and Microsoft's acquisitions over the last five years, and the US government has given them the green light when it comes to AI. It makes sense since the FTC and DOJ directors are appointed by the government, and the government is concerned about China's advances in AI.

Also, Google pulled the same move Microsoft did with Inflection AI. They hired Windsurf's CEO, its co-founder, and other key people, and licensed Windsurfs codebase without acquiring the company. It was the smartest business move they could make.

So from a business and political point of view, your assumption doesn't hold up.

> Openai's agreements with Microsoft is more probable than they did not complete the acquisition because of negative gross margins.

This is also incorrect and the first time I've heard this reason. Executives have already told reporters that OpenAI and Microsoft have an agreement, and Microsoft doesn't want OpenAI entering the software development arena. They hold the keys to GitHub, and that's keeping everyone out for now, including Google.

> Plus, the old adage about how a growing startup is worth more because of a stellar team. You strip a team away and still get 2x multiple is sure enough valuing the current ARR highly.

I don't think so. Investors back people first, and in AI, the people are everything. Just look at how much Meta is willing to pay top AI researchers. OpenAI, Microsoft, and Google are all chasing the same talent. Knowledge is extremely valuable when it comes to AI/ML.

Google learned this the hard way when it let Noam Shazeer leave. When they realised how valuable he was, they ended up paying $2.7 billion to bring him back.

Meta's case might be different, and hence i wrote it as scale would have been acquired in past times instead of an investment like they did today. For other companies, the hiring aspect avoids M&A filings, balance sheet consolidation, and still give the big tech companies access to IP and talent. Easier path to get what you want than say Wiz acquisition still waiting to be completed. The stance may have recently changed, but seems like big tech companies are not testing it. (it's also not just US, but other jurisdictions have a say too. Meta had to sell Giphy due to issue raised by UK/Europe)

Re Microsoft and Windsurf, this[1] article claims Windsurf did not want MS accessing it's intellectual property, a default condition for Microsoft OpenAI deal.

> Windsurf didn’t want Microsoft to have access to its intellectual property — a condition that OpenAI was unsuccessful in getting Microsoft’s agreement on, people familiar said. That was one of several sticking points in Microsoft and OpenAI’s ongoing talks about the AI company’s effort to restructure into a commercial entity. Microsoft’s existing agreement with OpenAI says the software giant is entitled to access the startup’s technology.

This is different from Microsoft not wanting openai to compete with Github copilot, given thats what they do with Codex anyway.

> Knowledge is extremely valuable when it comes to AI/ML We agree on that, but even in the past most acquisitions would value teams at a certain cost too. Without the team that built it, any company would struggle to get a good multiple. OP's claim was that lower multiple was cos of margins only, and i disagreed there.

[1]: https://www.bloomberg.com/news/articles/2025-07-11/openai-s-...