Latest / In the Loop AI / The War for Windsurf: The $3B AI Coding Agent (OpenAI vs Google vs Cognition)

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The War for Windsurf: The $3B AI Coding Agent (OpenAI vs Google vs Cognition) · In the Loop AI

0:02
Ejaaz: So there's this company called windsurf which in
0:05
Ejaaz: the last 24 hours got stolen from open ai
0:08
Ejaaz: and sold not once but twice for
0:12
Ejaaz: over 3 billion dollars and then
0:15
Ejaaz: everyone lost their minds completely when they realized that
0:18
Ejaaz: two of the co-founders were taking almost all of that money
0:21
Ejaaz: for themselves and leaving the rest of the
0:23
Ejaaz: company 250 employees in the
0:26
Ejaaz: dust and as you can imagine josh this sparked a lot of outrage online but it
0:32
Ejaaz: did end up having a fairy tale ending when another company swooped in and bought
0:37
Ejaaz: the rest of the company and the 250 employees got paid josh i'm exhausted can
0:42
Ejaaz: you tell me what's happening well
0:44
Josh: I'm actually not sure myself this feels like an episode out of like a sitcom
0:47
Josh: or a silicon valley episode where there's so much drama so many twists and turns
0:52
Josh: that seemingly don't make any sense i mean it was.
0:54
Ejaaz: Acquired i have a fun anecdote for you josh actually the office that the windsurf
0:58
Ejaaz: company was set up in guess no
1:02
Josh: Not silicon valley,
1:06
Josh: oh man it's so real silicon valley was such a testament at the.
1:09
Ejaaz: Time so i swear they
1:10
Josh: Were they were ahead of the curve but yeah i i'm actually i'm excited to record
1:14
Josh: this episode because i need you to explain to me a lot of what's happening i
1:17
Josh: don't know too much about the recent news i've been very much in in the grok
1:21
Josh: rabbit hole i know a lot of the earlier topics maybe i could help set the stage before we get into it.
1:26
Josh: So for people who aren't familiar, Windsurf was not always Windsurf.
1:29
Josh: It was a company that was founded in 2021 called Exifunction.
1:33
Josh: And it was founded by two MIT graduates initially focused on GPU optimization.
1:37
Josh: So they were a GPU optimizer company.
1:39
Josh: They were doing absolutely nothing relative to what they're doing today.
1:43
Josh: Three years later, they raised a series C round at $150 million,
1:46
Josh: which valued them unicorn status, one and a quarter billion dollars.
1:50
Josh: And that was when they rebranded to Windsurf. And Windsurf was not a GPU optimization
1:55
Josh: company. It was instead the company that we all know today, which is the AI
1:59
Josh: coding companion, cursor competitor, vibe coding extraordinaire.
2:04
Josh: Exactly. Yeah. So that's when they kind of came into their final form,
2:07
Josh: which was only last year.
2:09
Josh: So the first three years of operation, this like strange company trying to figure
2:14
Josh: it out last year, it was huge.
2:15
Josh: And then we get into 2025 where their annual revenue went from not a lot to
2:19
Josh: a hundred million plus. And I think this is where I'm going to hand it off to
2:22
Josh: you because things got crazy.
2:23
Josh: They turned into a really big company. They started collecting valuable data.
2:26
Josh: Their revenue went through the roof into the nine figures.
2:29
Josh: And that's where this drama begins.
2:32
Ejaaz: So Josh, do you remember around that time, it became a kind of trending narrative that AI...
2:39
Ejaaz: Coding or coders was going to replace software engineers. So companies were
2:43
Ejaaz: getting really nervous and software engineers were getting really nervous because
2:46
Ejaaz: they were kind of like consistently held in as like the highest regard of employee, right?
2:51
Ejaaz: You had like knowledge workers, product managers, and then you had like the
2:55
Ejaaz: wizards at the top that could like create software with their fingers.
2:58
Ejaaz: And then you had AI come along and be like, well, actually, we might be able
3:01
Ejaaz: to replace you in about six months.
3:03
Ejaaz: So all of these companies' valuations skyrocketed, Winsurf being one of them, right?
3:07
Ejaaz: Cursor was another popular one. And there was this massive frenzy for all the
3:11
Ejaaz: model creator companies like OpenAI, Claude, Meta, to try and acquire one of
3:17
Ejaaz: these companies so that they can have that feature set within their own product suite.
3:21
Ejaaz: And OpenAI kind of came in guns ablaze and said, Winsurf, we have tried to buy Cursor.
3:28
Ejaaz: It's not working. We need you. And we are willing to pay big bucks.
3:32
Ejaaz: So they offered basically $3 billion and it's written here in this Reuters article,
3:37
Ejaaz: but that's basically the headline takeaway that they offered $3 billion to buy these guys out.
3:42
Ejaaz: And that was a huge price tag at the time, but it was what a lot of individuals
3:47
Ejaaz: thought, a lot of people thought that Winsurf and AI vibe coding companies was worth at the time.
3:52
Ejaaz: And the reason why it was worth this much was because it was like this magical
3:55
Ejaaz: tool where you could type words and turn words into fully fledged apps,
4:01
Ejaaz: games, tools, services,
4:03
Ejaaz: Therapy apps, gym logs, whatever you might, whatever your mind could potentially think of.
4:08
Ejaaz: It's like turning chat gbt into like this like app
4:11
Ejaaz: maker and that as you can imagine is a billion dollar multi-billion dollar industry
4:16
Ejaaz: and you can kind of like see on my screen here like there's this like demo on
4:19
Ejaaz: this website where you can effectively just type words in and say like hey i
4:24
Ejaaz: want you to create like a folder or a website that like kind of displays my
4:28
Ejaaz: profile picture and all these kinds of things and it just
4:30
Ejaaz: You can see it coding in real time on the left here, Josh.
4:33
Josh: Yeah, and the interface is the thing that's different, right?
4:36
Josh: Because when you're using ChatGPT, it can code very well, but you only have
4:39
Josh: a text box and it kind of spits out code, but then you have to put it into your
4:42
Josh: compiler and it creates this like very messy workflow.
4:45
Josh: What Windsurf did is they kind of took that whole workflow and compressed it
4:48
Josh: down into one really powerful tool.
4:50
Josh: And that's what we're seeing here, right? It's like, this is the developers
4:52
Josh: come all in one, build your code, generate your code, debug your code all under one roof. Right.
4:59
Ejaaz: So you can imagine that if you are a software engineer that learns how to use
5:04
Ejaaz: this tool or gets access to a tool like this, you can suddenly work at 10x your
5:09
Ejaaz: speed and output, right?
5:10
Ejaaz: So there's this term that's often used in tech, which is called like 100x engineer,
5:14
Ejaaz: and they're usually super rare.
5:16
Ejaaz: This tool turns everyone into 100x engineer.
5:20
Ejaaz: And that means that you could hire probably fewer engineers to get your thing
5:24
Ejaaz: done, or you could scale your company 100x from where it is right now,
5:28
Ejaaz: just using existing employees and access to this tool, which is insane, right?
5:31
Ejaaz: So you can imagine something like this is worth a ton of money.
5:34
Ejaaz: But if you remember on a previous episode, Josh, we actually mentioned that
5:39
Ejaaz: OpenAI wasn't just, didn't just get to where they were on their own, right?
5:44
Ejaaz: They had some pretty impressive backers behind them. And one of their backers
5:48
Ejaaz: was this little known company called Microsoft.
5:51
Josh: I remember that.
5:52
Ejaaz: You remember Microsoft? You know, they've been around a while,
5:55
Ejaaz: right and some of the terms that microsoft struck with open air when they invested
6:00
Ejaaz: i think something to the tune of 16 billion dollars josh or is it like 24 i
6:05
Ejaaz: feel like i'm off by like 10 billion which is just like tens of billions tens
6:09
Ejaaz: of billions okay let's just go with casual tens of billions
6:12
Ejaaz: Part of the terms that they struck with OpenAI was that they get full access
6:16
Ejaaz: and IP control over OpenAI's models up until the year 2030.
6:20
Ejaaz: And also they get a significant chunk of revenue that OpenAI generates.
6:25
Ejaaz: And the final point, which is what is about to cause the rift that I'm about
6:30
Ejaaz: to describe, was access to any and all IP that they may acquire as well, Josh.
6:37
Ejaaz: So as you can imagine, OpenAI is buying this massively valuable company,
6:41
Ejaaz: Windsurf, for $3 billion.
6:43
Ejaaz: And their plan presumably is to build an amazing product suite and earn tons of money from it.
6:48
Ejaaz: But Microsoft would be eligible to owning the IP of Windsurf.
6:52
Ejaaz: And Sam Altman, OpenAI didn't like this.
6:54
Ejaaz: So the rumor behind the scene was that Sam Altman was negotiating with Microsoft,
7:00
Ejaaz: basically trying to get them off the cap table with that respect and not give
7:03
Ejaaz: them access to Windsurf.
7:05
Ejaaz: There was a lot of back and forth, a lot of insider knowledge,
7:07
Ejaaz: basically saying that Satya wasn't happy and that they couldn't come to an agreement.
7:11
Ejaaz: So the rumor was Satya walked away from the negotiating table.
7:16
Ejaaz: Now, typically, when an offer is made as big as this, $3 billion,
7:20
Ejaaz: It comes with some terms and conditions.
7:22
Ejaaz: And usually it comes with an expiry date.
7:24
Ejaaz: So if, God forbid, anything goes wrong, the deal suddenly becomes off the table.
7:29
Ejaaz: So, you know, typically anyone has kind of like an out.
7:32
Ejaaz: And what happened after Microsoft walked away from the negotiating table was
7:36
Ejaaz: that this $3 billion dollar offer josh expired on july 11th so literally a few
7:42
Ejaaz: days ago and that's when all the drama started
7:45
Josh: Unwinding expiration that is like a tremendous amount of money just to let,
7:51
Josh: expire right i feel like if i was i mean put yourself
7:54
Josh: in the the shoes of a windsurf employee where you own
7:58
Josh: equity you are worth on paper now a tremendous amount
8:00
Josh: of money and you're sitting there every day waking up looking at
8:04
Josh: like the news like am i going to get this money or is this
8:06
Josh: going to respond and then it expires it's like an option if you have a call
8:09
Josh: option it just expired worthless you you're left with nothing so now the windsurf
8:14
Josh: employee i guess i'll play that role because i'm pretty clueless in this whole
8:16
Josh: thing i'm pretty sad but i know my company's still worth a lot so like what
8:21
Josh: happens next to me as the windsurf employee after okay a ideal falls through i.
8:26
Ejaaz: Want you to to envision this josh okay so you're a windsurf employee and you've
8:32
Ejaaz: kind of been told that OpenAI is going to buy you for $3 billion.
8:35
Ejaaz: You go to bed one day, you wake up the next, and you realize that the deal has expired, right?
8:40
Ejaaz: And then a couple of hours, yeah, it's expired, it's done.
8:43
Ejaaz: And then a couple of hours later, you open up your laptop and you see this tweet.
8:50
Ejaaz: Josh, tell me about your reaction.
8:52
Josh: Big welcome to Mohan Solo and others from the Windsurf team joining DeepMind.
8:56
Josh: Now, if I remember correctly, the name of my CEO is the same handle that that was tagged in this post.
9:03
Ejaaz: Exactly.
9:03
Josh: Okay, you're good so far. I believe I've just learned that the CEO of my company,
9:08
Josh: as well as other, I guess, higher executives.
9:11
Ejaaz: You, the Windsurf team.
9:13
Josh: Me. I'm joining Google. I'm going to Google today. You're joining Google.
9:16
Ejaaz: You're joining Google, Josh. You're joining Google. Congrats.
9:20
Ejaaz: Are they paying me $3 billion?
9:22
Ejaaz: Exactly. And now your question is, are you paying $3 billion?
9:25
Ejaaz: Well, what if I told you this, Josh? They're not paying you $3 billion.
9:30
Ejaaz: They're paying you a little less. They're paying you $2.4 billion.
9:35
Ejaaz: Okay. How does that sound? So far, so good? Yeah.
9:38
Josh: I mean, at least better than nothing.
9:39
Ejaaz: You'll take that. You'll take it, right?
9:41
Josh: That'll make me multimillionaire for sure. That seems pretty chill.
9:45
Ejaaz: Sounds good. Except that there's one clause, which is that $2.4 billion is actually
9:51
Ejaaz: being used to buy your CEO that was just named in that tweet,
9:55
Ejaaz: one of his other co-founders and about four researchers on the entire company team.
10:03
Ejaaz: So this $2.4
10:04
Josh: Billion is really just an acqui-hire for the talent.
10:10
Josh: A hundred percent. And they're still not buying my company.
10:14
Ejaaz: Yeah. So the long story short of this is Google announced that they struck a
10:20
Ejaaz: deal with Winsurf, particularly the CEO, and agreed to pay $2.4 billion,
10:26
Ejaaz: but primarily to hire Winsurf CEO and one other co-founder and a group of key researchers,
10:32
Ejaaz: along with the non-exclusive rights, non-exclusive licensing rights to some
10:39
Ejaaz: of Winsurf's technology.
10:41
Ejaaz: So this is, as you said, yeah, you just got zapped. They just paid a couple
10:44
Josh: Hundred million dollars, took the talent out of my company, and now I'm just
10:47
Josh: left with the shell, which is devastating, right?
10:50
Josh: I work so hard on building this. I am the reason this value exists because I
10:54
Josh: have been working hardcore engineering on this for years, And that seems really upsetting.
10:59
Ejaaz: Think about it. You are a founding engineer of this company.
11:02
Ejaaz: You're a founding employee of this company.
11:04
Ejaaz: Typically, you'd expect when you go from zero to $3 billion,
11:08
Ejaaz: you're going to see at least some of that.
11:11
Ejaaz: Surely, they're not going to concentrate over $1.25 billion for a single person.
11:17
Ejaaz: Surely, that's ludicrous, right? But that's unfortunately exactly what happened.
11:21
Ejaaz: So $2.4 billion for like five people and non-exclusive licensing rights for
11:27
Ejaaz: like some of Windsurf's tech.
11:28
Ejaaz: But the majority of the 250 people, its core business, the IP,
11:33
Ejaaz: the product, the brand, and the remaining team just kind of got left to the wayside.
11:38
Ejaaz: This was a pure play acquire.
11:41
Josh: Yikes. And I guess we could kind of speculate on what led to this.
11:45
Josh: Like if you remember, we actually spoke about this briefly on the show when
11:49
Josh: OpenAI made the offer to acquire Windsurf, immediately Anthropic and a few others
11:53
Josh: started pulling out their contracts with Windsurf.
11:56
Josh: So they were making the product less valuable because they didn't want to give
12:00
Josh: their data over to OpenAI.
12:02
Josh: As a result, it lowered the valuation of the company.
12:05
Josh: So when OpenAI then steps away and Winsurf still has to deal with the lost customers
12:12
Josh: of Anthropic and whoever else stepped away, well, suddenly the company is worth a little bit less.
12:16
Josh: And now Google steps in, they're like, okay, well, maybe we get a discount because
12:19
Josh: now your average revenue or your recurring revenue is way lower than it was
12:24
Josh: just a few months ago. So there's your 25% haircut.
12:27
Josh: And then they're like, well, we don't actually want the business because the
12:31
Josh: business is kind of failing. There's a lot of drama.
12:33
Josh: There's a lot of, a lot of your larger clients aren't interested because they're direct competitors.
12:37
Josh: So let's just take the talent. And that is such a sad thing to watch your baby
12:42
Josh: just get pummeled over and over again by these high executives.
12:47
Josh: But it's on, it's on brand, right? Like we've seen this happen before.
12:50
Josh: Zuck is offering hundreds of millions to billions for employees.
12:54
Josh: And now Google is doing the same exact thing.
12:57
Ejaaz: I think you just highlighted a really important trend, which has just been confirmed.
13:01
Ejaaz: By these events, Josh, which is the stars of the show for any AI company are
13:07
Ejaaz: its researchers, are its model creators.
13:10
Ejaaz: They're the ones that are selling for like multiples of a top NBA super sports star, right?
13:18
Ejaaz: Hundreds and hundreds of millions, potentially billions for a single person.
13:23
Ejaaz: That is just an absurd amount of money and has probably never been seen the
13:27
Ejaaz: like from any kind of industry before, right?
13:29
Josh: They're like professional sports athletes.
13:31
Ejaaz: Yeah. Yeah, they're not worth their weight in gold. They're worth a hundred
13:35
Ejaaz: times their weight in gold, apparently, right?
13:37
Ejaaz: And then the second thing I think that's happening here, Josh,
13:40
Ejaaz: is Google got a bit antsy when they saw that Zuck aggressively poached OpenAI's staff.
13:48
Ejaaz: I think they hired like, what, 10 people? So that's probably somewhere around
13:53
Ejaaz: $2.5 billion spent, if we want to believe the rumors of like hundreds of millions
13:58
Ejaaz: being spent for certain researchers.
14:00
Ejaaz: So Google's probably watched this happen over the last two weeks,
14:03
Ejaaz: which is an insane thing to say, by the way.
14:05
Ejaaz: This has happened over the last two weeks and thought, oh shit, we're next in line.
14:10
Ejaaz: We're the next best model provider for many a reason.
14:13
Ejaaz: They have access to all our AI papers so they can see who the best researchers that we have are.
14:18
Ejaaz: And Zuck's probably reaching out to all of these. So they saw this opportunity
14:22
Ejaaz: and jumped on it and decided to do the opposite and say, well, screw you, Zuck.
14:27
Ejaaz: I know what you're coming for, but I'm going to jump ahead of the curve and
14:30
Ejaaz: actually poach these guys before you do so that we keep bolstering confidence
14:34
Ejaaz: in our team and our ability to build up the team? What do you think of that? Is that fair?
14:39
Josh: Yeah, well, one of the biggest things I've been wondering is like,
14:42
Josh: how are they actually worth $100 million? How are they worth a billion dollars for a single person?
14:47
Josh: And I posted this publicly and I like did some digging and the answer is really,
14:52
Josh: it's still a fuzzy answer, but basically they're a series of difficult problems,
14:56
Josh: most of which are unknown that are required to be solved in order to reach this goal.
15:01
Josh: So in the case of training improvements, I mean, we spoke about Kimi K2 yesterday.
15:06
Josh: The reason that model performed so well is was because a novel breakthrough
15:09
Josh: that a researcher discovered and then deployed into the code base.
15:12
Josh: And now they have a model that competes with Claude, but it's open source and free to use.
15:16
Josh: So that's a huge advantage. And that is a multi-billion dollar advantage at scale.
15:20
Josh: So if you can pay one researcher to come up with a novel breakthrough like this
15:24
Josh: and then deploy it to your code base, then suddenly you have gained billions
15:28
Josh: of dollars of market cap. and it compounds because the scale is so large.
15:32
Josh: And this exists all the way down the stack because when you're doing a training
15:34
Josh: run, I mean, a lot of these companies have 100,000, 200,000 GPUs that are all
15:38
Josh: focused on one single training run.
15:41
Josh: And that means they can't be serving customers. They can't be serving queries
15:44
Josh: to make the company money.
15:45
Josh: It is a net spend that they're incurring to train this model.
15:49
Josh: And in the case that an engineer didn't make the right decision or went down
15:54
Josh: the wrong decision tree, that could cost them many, many billions of dollars,
15:59
Josh: days, weeks of time. and in this world, those weeks cost a lot of money.
16:03
Josh: So basically what I realized, what I came to consensus on is they're just giving
16:06
Josh: themselves the best probability by having the most intelligent people on the
16:11
Josh: specific topic of making the correct decision trees required to get to where they want to go.
16:15
Josh: And that is why the stakes are so high. And that's why they're being paid billions
16:19
Josh: of dollars because someone like Ilya, who has been around for a decade plus,
16:23
Josh: is probably most likely to make the right decisions, even though it's no guarantee.
16:28
Ejaaz: What you've just described is the wild west and
16:31
Ejaaz: i love how you described it as kind of like an ai model
16:34
Ejaaz: josh you were like it's probabilistic we don't
16:37
Ejaaz: really know which path it's going to take but they're running it through this
16:39
Ejaaz: model and they're estimating that the output would be like this so they're spending
16:43
Ejaaz: hundreds of millions of dollars i thought it was beautifully done but josh if
16:47
Ejaaz: you remember at the start of this episode i said that it ended like a fairy
16:52
Ejaaz: tale So right now, we're at devastation point, right?
16:56
Josh: I'm deep in my nightmare right now. I'm living it. I've just seen my entire
16:59
Josh: C-suite get poached for two and a half billion dollars. I got nothing.
17:02
Ejaaz: You just hustled for five to 10 years and you have nothing to show for it.
17:07
Ejaaz: You have a family of kids to feed and you promised them you're going to get
17:11
Ejaaz: them millions and nothing's happened, right?
17:14
Ejaaz: So here's what happens next. Do you remember way back when, and I think this
17:19
Ejaaz: is like a year ago, when the first AI engineer agent was released.
17:25
Ejaaz: It was this thing called Devin, D-E-V-I-N. Do you remember that?
17:28
Josh: I do, yeah. Yeah.
17:30
Ejaaz: Yeah. Do you remember the hype that was caused because of it?
17:34
Ejaaz: I think they released like this 30 second demo of this really slick AI agent.
17:39
Ejaaz: It's kind of like ChatGPT, but it was just doing all the coding and engineers
17:43
Ejaaz: lost their mind. They were like, oh my God, I would. There were two camps.
17:46
Ejaaz: One, I would love using a tool like this and it'll enhance me 10x or whatever.
17:51
Ejaaz: And then a vast swathe of people online that hated it and said,
17:56
Ejaaz: there's no way it's as good as it is. and then, you know, A16Z jumped in.
18:00
Ejaaz: I think they threw them like a $200 million check, classic A16Z.
18:03
Ejaaz: And there was a lot of hype around this. That was like one of the clearest signals
18:07
Ejaaz: early on that Vibe coding was going to become a thing. Do you remember that?
18:10
Ejaaz: I do. So this company that created Devin is called Cognition.
18:16
Ejaaz: And we saw this post come up literally the day after Google's acquisition.
18:21
Ejaaz: So imagine you wake up one day, you realize you've lost the OpenAI deal. You're like, damn.
18:26
Ejaaz: And then a few hours later, So you see the tweet from Logan Kilpatrick from
18:30
Ejaaz: Google saying, hey, we bought you for $2.4 billion.
18:33
Ejaaz: You're elated until you realize that you're not getting paid any of that stuff.
18:37
Ejaaz: So you go into like peak depression.
18:39
Ejaaz: And then the next day, you see an announcement from Cognition.
18:43
Ejaaz: And this is the official announcement on Cognition's website.
18:45
Ejaaz: Cognition acquires Winsurf.
18:48
Ejaaz: And it's this joint announcement from the CEO of Cognition, which is Scott Wu.
18:55
Ejaaz: And one of the co-founders and by the way this is the co-founder that didn't
18:59
Ejaaz: get included in the $2.4 billion win self deal Man, that's got to sting Yeah,
19:04
Ejaaz: yeah, yeah Well, calling him a co-founder is kind of like a bit of a
19:08
Ejaaz: kind of like graceful title to give him. But his name is Jeff Wang.
19:12
Ejaaz: And he was the recently appointed CEO after the two co-founders just ditched him, basically.
19:18
Ejaaz: And they were like, okay, Jeff, you're head of BD, but we need you to step up
19:22
Ejaaz: as CEO because we're going to bounce and take this billion dollar check.
19:25
Ejaaz: But you're the new CEO. So this guy, Jeff Wang, and this CEO, Scott Wu of Cognition,
19:33
Ejaaz: struck a deal to basically take over the remaining IP, product,
19:38
Ejaaz: brand, And remaining team, most importantly, 250 individuals all have families,
19:43
Ejaaz: mouths to feed, whatever lives to live and include them in this package deal.
19:48
Ejaaz: So this was the major announcement that like kind of like swept the social media
19:52
Ejaaz: realms and made everyone super happy and elated by this and,
19:56
Ejaaz: you know, gave them their happy ending.
19:58
Josh: What was the total cost that they paid? Did they announce that?
20:01
Ejaaz: That's a great question. Let me pull up this tweet of this guy called Harry.
20:06
Ejaaz: Oh, here we are. His title is Harry Digresses.
20:09
Ejaaz: It wasn't official how much they got paid for, but there were some really amazing
20:13
Ejaaz: deal terms in this, Josh.
20:14
Ejaaz: So I'll highlight a few things here. The first one is this.
20:18
Ejaaz: So not only were all 250 employees that were left behind going to get paid,
20:24
Ejaaz: but they were going to have all their cliffs removed and have accelerated vesting on all their equity.
20:30
Josh: Amazing. Okay. So they're making things right, or at least as best they can.
20:33
Josh: It's not the $3 billion dollar offer initially but like they're doing the best
20:36
Josh: they can and i mean as an employee of windsurf that feels really good feels.
20:41
Ejaaz: Really good but then you're you're wondering you're wondering well how much
20:44
Ejaaz: am i am i getting paid like like how much are we getting acquired
20:47
Josh: For yeah let's say i had one percent i mean that's 30 million dollars i was
20:51
Josh: about to bag and now so where are we at now it.
20:55
Ejaaz: Might be it might be a little less but he basically does this
20:57
Ejaaz: rundown and estimates it to be around 300 to 400 million dollars which is a
21:04
Ejaaz: significant drop from what you are going to get paid but it's also not nothing
21:09
Ejaaz: the other way i was thinking about it is it's probably all in cognition stock
21:13
Ejaaz: josh there's no way they had that much
21:15
Josh: Cash yeah just cash sitting on hand okay so my my 30 million dollars is now
21:20
Josh: three million dollars in stock for cognition which is a private company not
21:27
Josh: even liquid oh yeah lots of tax implications,
21:31
Josh: okay so i mean at least i have a job i guess is where i'll end up on this is like cool.
21:38
Ejaaz: I mean, now that I recounted to you, Josh, you're still screwed.
21:43
Josh: You're still screwed, dude. At this point, I'm just happy to be employed.
21:45
Josh: I'm just glad that I still have some sort of a job. I'm hopefully collecting some sort of paycheck.
21:50
Josh: One day, it is hopeful that the stock will be worth money, and then I'll be
21:54
Josh: able to sell it and cash out. But man, yeah, what a roller coaster.
21:57
Josh: And it kind of sets this new paradigm, right? Where you can cut,
22:00
Josh: you could kind of rip the value out of a company and then just kind of throw the rest to the side.
22:05
Josh: But it's this really interesting ideological debate you could have as a founder
22:10
Josh: of a company whose fiduciary duty is to serve right by the shareholders.
22:14
Josh: And in this case, your shareholders are the employees that you've given stock options to.
22:19
Josh: And in the case that they're just going away and they've destroyed the value
22:24
Josh: of the company, they've extracted the value of the acquisition.
22:28
Josh: They have kind of just left the shell of a company and left the people who are
22:32
Josh: responsible for putting them in that place on the side of the road and like
22:36
Josh: that doesn't feel very good but there's really nothing legally preventing them
22:40
Josh: from stopping that it's really just an ideological,
22:44
Josh: debate in this case it doesn't i mean i'd be pretty i'd be pretty upset sure
22:48
Josh: if i'm one of the founders i just made a billion i'm now a billionaire like
22:51
Josh: that's cool but for everyone else. It kind of leaves a bed for the.
22:55
Ejaaz: Majority of people. Yeah, you're screwed. I don't know whether it's because
23:00
Ejaaz: of all the time I've spent in web three, Josh, but I've kind of grown numb to
23:05
Ejaaz: all this like terrible, appalling behavior, unequitable behavior.
23:09
Ejaaz: And so I kind of look at a story like this and I'm like, oh yeah,
23:12
Ejaaz: he got paid billions and left the entire company and team to dry.
23:18
Ejaaz: Yeah. Happens all the time, I guess. But like, I'm just, I'm noticing this trend,
23:22
Ejaaz: particularly within AI that there's this more wild
23:25
Ejaaz: west kind of degenerate behavior when it comes to acquisitions like people are
23:30
Ejaaz: ruthless and i don't know whether this is maybe it's my naivety when it comes
23:33
Ejaaz: to like vc deals and acquisitions and mergers maybe i just i just don't know
23:37
Ejaaz: maybe this happens all the time but this seems like the most extremely skewed version of this and
23:44
Josh: We often refer to it on the show as like the game of thrones and
23:47
Josh: i don't think there's a much better description than that where it really is
23:50
Josh: cutthroat and this happens a lot in traditional venture and acquisitions but
23:53
Josh: this scale i think has never been greater and that's probably what stands out
23:58
Josh: among all of these headlines is just how much money is being made lost and thrown
24:02
Josh: around to position yourself better to get to this point of agi but you have
24:07
Josh: a tweet you had a post here it looks.
24:09
Ejaaz: Funny just to round us out josh just to like put a bit of cherry on this cake
24:15
Ejaaz: well the tldr is like everyone hates varoon mohan the former ceo who took the
24:22
Ejaaz: 1.5 billion dollar check or however much it was.
24:25
Ejaaz: And everyone loves Scott Wu, the CEO of Cognition Lambs, who stepped up,
24:29
Ejaaz: gave the 250 employees a salary and a lifeline and accelerated vesting.
24:35
Ejaaz: So no matter the size of the money, shout out to Scott Wu. He didn't need to do that.
24:39
Ejaaz: And then, you know, Varun, I wonder, you know, whether his reputation survives this.
24:44
Ejaaz: I can see the reasoning why you would take the big check, but also like leaving
24:49
Ejaaz: all your employees out like that to drive without even giving them,
24:51
Ejaaz: I don't know, a couple mil is kind of insane. But here we are.
24:56
Ejaaz: So what's the price on your reputation?
24:58
Josh: Like, would you take a couple billion dollars to just go work on AGI and let the.
25:02
Ejaaz: Media do a thing for a couple of weeks? I know a lot of people that would do
25:04
Ejaaz: it. I know a lot of people. I mean, I'm one of them.
25:07
Josh: I'd probably do that, right? Like, a couple billion dollars? I don't know.
25:11
Josh: But also, yeah, it's tough. Well, it's funny because at this graphic,
25:14
Josh: it's a win-win for both of them.
25:15
Josh: Like, Varun is, or I'm not sure how you pronounce his name, but he's hated.
25:20
Josh: The CEO of Winsurf is not liked, but he's rich. and Scott Wu is loved.
25:25
Josh: And now he has a bunch of employees that really want to work hard to make this
25:29
Josh: work for him and really want to add value to his company and can go to sleep
25:33
Josh: with a good conscience knowing he's done well and he's done right by these people.
25:37
Josh: Whereas our windsurf buddy cannot do that. So maybe he will just be,
25:41
Josh: one of them will be crying in their $100 million mansion while the other will
25:45
Josh: be surrounded by people who love him dearly.
25:48
Ejaaz: Yeah, I think that's pretty much it. An absolutely outrageous,
25:51
Ejaaz: but weirdly normal day in the world of AI, Josh.
25:56
Ejaaz: We thank you guys for listening. We are trying out this new format.
26:00
Ejaaz: We've said this before, where we kind of talk about trending topics and be or
26:05
Ejaaz: try and be the first guys to talk about it and put it in front of your feeds.
26:09
Ejaaz: We are welcoming any and all feedback. So, you know, any kind of comments or
26:13
Ejaaz: DMs, it's all open, go for it.
26:16
Ejaaz: And if you could like, subscribe and share it with all your friends or anyone
26:18
Ejaaz: who you think would be interested in this kind of thing, we would be eternally
26:22
Ejaaz: grateful and we'll see you on the next episode see you
26:25
Josh: On the next one peace guys.
26:27
Music: Music