2025-12-27T10:00:01.220Z

Nvidia shocked the tech world with the news of entering into a licensing agreement with Groq.
Terms were not disclosed, though many on X have criticized the deal for leaving employees out.
Traditional acquisitions have become rarer because of the uncertainty of regulatory approval.

On Christmas Eve, Nvidia shocked the tech world with the announcement that it is entering into a non-exclusive licensing agreement with Groq, a company that designs custom chips for AI inference.

While terms were not disclosed, many criticized the deal for leaving employees out in the cold.

Groq’s founder and CEO, Jonathan Ross, along with top engineering staff, will join Nvidia. The startup was valued at $6.9 billion in its latest funding round three months ago and will continue to operate independently, albeit without its key leadership team.

Twas the night before Xmas
When all through the house
Groq employeee were crying
From being left out

— Josh Constine 📶🔥 (@JoshConstine) December 25, 2025

Here’s why it’s unsettling to some: For decades in Silicon Valley, early employees have worked grueling hours and accepted lower salaries in the hope that they will share in the riches should their startup eventually get acquired or go public.

Now, traditional acquisitions have become rarer because of the time and uncertainty of getting regulatory approval. As a result, companies like Nvidia have been getting creative, using licensing deals to skirt regulators and snap up key talent quickly.

The deal sounded familiar to many closely following the tech industry. After all, the past two years saw a spate of similar AI deals, and the tech industry will likely see more next year.

so groq got windsurfed?

is this the new way to “acquire” without acquiring the company?

— Micky (@Rasmic) December 25, 2025

Here are 5 other similar AI deals:

Windsurf

Varun Mohan is the CEO and Co-Founder of Windsurf,

Windsurf cofounder Varun Mohan is now an engineer at Google.

20VC/YouTube

Windsurf, an AI coding company, was on the verge of being acquired by OpenAI for $3 billion when the deal fell apart at the last minute.

Google emerged as a new suitor. Instead of an outright acquisition, Google said it would pay $2.4 billion to hire its CEO and top talent, as well as license the company’s intellectual property.

Windsurf effectively got cleaved into two pieces, with the hundreds of remaining employees ending up at Cognition, another AI coding startup.

“This breaks the Silicon Valley social contract,” Amjad Masad, CEO of Replit, a competitor to Windsurf, said at the time. “This is bad for startup employees. They’re going to be less likely to join startups. What’s the point of joining a startup and working your ass off if you might get screwed?”

Scale AI

Alex Wang

Scale AI founder Alexandr Wang, who is now Meta’s chief AI officer.

Taylor Hill/FilmMagic

In June, Meta spent $14.3 billion to buy a 49% stake in Scale AI and poach its CEO, Alexandr Wang.

A recent Business Insider investigation found the vast army of human data labelers that made Scale AI a juggernaut are chafing at what they say are pay cuts, lengthy unpaid onboarding sessions to join new AI projects, and thinning workloads — and are increasingly leaving altogether.

Joe Osborne, a spokesperson for Scale AI, says the balance sheets show the company is on the right path.

“This quarter is on track to be our biggest of 2025, our data business is more profitable today than it was before the Meta deal,” Osborne told Business Insider.

Character AI

Character.AI's cofounders, Noam Shazeer and Daniel De Freitas, now work at Google.

Character.AI’s cofounders, Noam Shazeer and Daniel De Freitas, now work at Google.

Winni Wintermeyer for The Washington Post via Getty Images

Last year, Google agreed to pay $2.5 billion to license Character AI’s technology and hire its two superstar cofounders and 20% of employees.

“Seeing these acquihires for companies that have raised so much money so quickly is kind of a shock,” Brett Queener, managing partner at Bonfire Ventures, said at the time.

Inflection AI

Mustafa Suleyman

Inflection AI cofounder Mustafa Suleyman is now Microsoft’s AI CEO.


Stephen Brashear/Getty Images

Last year, Microsoft hired Inflection AI’s cofounder, Mustafa Suleyman, and almost all its employees. It agreed to pay the startup around $650 million as part of a licensing fee.

The startup had raised more than $1 billion from backers including Bill Gates, Eric Schmidt, and Nvidia.

The FTC has formally opened an investigation into the Microsoft deal.

Adept

Amazon CEO Andy Jassy

Amazon CEO Andy Jassy.

Thos Robinson/Getty Images for The New York Times

Founded in 2022 by top researchers from OpenAI and Google, Adept raised over $400 million and was valued at $1 billion, with backers including Microsoft and Nvidia.

Then last year, Amazon hired Adept’s co-founders and some of its employees to help bolster the tech giant’s AI capabilities.