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MC.83: The irony of the Windsurf deal
In the world of AI, are humans the most valuable asset?
Note: We are experimenting with a new format for MC. Different prompts, description of my personality as context and Kimi 2 as the main model.
Let us know what you think.
Executive Summary
The Windsurf acquisition reveals a profound truth about AI's economic reality: we're witnessing the birth of a new asset class where exceptional human talent commands unprecedented premiums.
While the $2.4B headline grabs attention, the real story exposes how the AI revolution has inverted traditional value creation: transforming brilliant engineers into the ultimate scarce resource and forcing us to rethink everything we know about building defensible businesses in the age of artificial intelligence.
The Deal Anatomy
Let's decode what really happened here.
Microsoft's exclusivity clause basically killed the initial OpenAI acquisition before it could get off the ground.
Google pulled off a reverse acqui-hire: the top team joins DeepMind while they secure a non-exclusive license deal.
Cognition swooped in for the clean-up, grabbing $250M worth of remaining asset.
But the hidden structure is where it gets interesting: a complex package that includes lost equity compensation, performance bonuses, and licensing fees.
But here's what's been eating at me...
The Uncomfortable Truth
Windsurf's core IP isn't worth $2.4B. Not even close. What Google actually bought was
Ten exceptional brains who can rebuild anything in seven weeks
A proven ability to execute at lightning speed
A deep understanding of the AI application layer.
What they didn't buy?
Defensible technology moats, unique model architecture, or irreplaceable IP.
This isn't an acquisition, it's the world's most expensive talent grab disguised as a technology purchase.
The Talent Arbitrage Game
We're watching something pretty wild unfold. Talent is being valued at 10-100x their "rational" worth, execution speed beats IP every single time, and the best teams can clone any AI application in weeks, not years.
The Anthropic → Anysphere → back to Anthropic pipeline? Just another example of this pattern.
We're not investing in companies anymore. We're investing in genetic lottery winners who happen to code really well with AI.
The Three Questions Keeping Me Up at Night
After diving deep into this deal, I keep coming back to three questions that should terrify every AI entrepreneur.
What's Actually Defensible? If the Windsurf team can rebuild their product in seven weeks, what stops anyone else? The brutal answer: almost nothing. The moat isn't technology, it's how fast you learn and execute.
Who Actually Captures the Value? Look at the structure: founders and early employees got rich. Investors? That's... less clear. The $2.4B bet assumes these people can create similar magic inside Google. That's a bet on humans, not code.
What's the Sustainable Model? If you're building an AI application today, how do you avoid becoming just another demo that exists to showcase talent for the next acqui-hire?
My Creative Destruction Playbook
Here's what I'm telling founders who corner me about AI valuations: Stop trying to build defensible IP.
Build learning velocity instead, teams that get 10% better every week.
Focus on creative synthesis, finding unique ways to combine existing models.
Create community gravity where users stick around for the journey, not just the destination. And above all, develop brand authenticity, a voice that can't be replicated.
If You're a Founder: Build for learning speed, not scale. Your moat is evolution velocity. Document your process publicly and turn learning into content gravity. Focus on creative synthesis.
The magic is in uniquely combining existing pieces. Design for humans because AI is the commodity; human insight is the differentiator.
If You're an Investor: Value learning velocity over current metrics. Bet on teams who can rebuild in under eight weeks. Look for creative synthesis, not technical breakthroughs. And accept that you're betting on genetic lottery winners.
The Meta Lesson
The Windsurf deal reveals the ultimate irony of our AI moment: the most valuable thing in the age of AI isn't the AI, it's the human ability to learn faster than the AI improves.
Every founder building AI applications needs to internalize this brutal truth. You're not in the technology business. You're in the meta-learning business. The question isn't "Can we build something defensible?" but "Can we learn faster than anyone can copy us?"
Final Thought
As I wrap this up, I'm struck by how the Windsurf deal captures everything fascinating and terrifying about right now. We're watching the entire concept of "company value" get rewritten in real-time.
The $2.4B isn't for what Windsurf built. It's for what they proved was possible when exceptional humans dance with powerful AI. And honestly? That might be the most valuable insight of all.
Modern Chaos explores the intersection of technology, business, and society in an age of rapid transformation.
P.S. If this analysis resonates with you, forward it to a colleague who needs to hear it. We're building a community of leaders who think critically about AI implementation.
I want to hear from you: What's your biggest AI reality check moment? When did you realize the gap between promise and practice?
Reply and share your story—I read every response and feature the best insights in future newsletters.
Until next Thursday 🎉
Cheers,
Olivier
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