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The HALO Effect - kwokchain

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Over the last year, a new breed of deal structure has emerged in AI: an alternative to acquisitions and hiring that shares traits of both yet isn’t quite either. Companies like Inflection, Character AI, Adept, Covariant and most recently Windsurf have used this new structure in a common pattern. A core team from the startup–usually including the founders and research team–are hired by a company in tandem with a non-exclusive license to the startup’s IP being inked. In return, the startup receives substantial licensing fees that are distributed as dividends out to their investors and employees. And in the part that most baffles outside observers, the startup continues operating now under new leadership. These aren’t acquihires. The buyers don’t acquire the company, they hire the people and license the startup’s IP. And these deals share a few other common characteristics: they happen extremely quickly, have enormous price tags, and are only being used in AI (for now). Despite their scal

Kevin Uncategorized July 15, 2025 July 15, 2025 Notes on the recent trend of “Hire and License Out” deals in AI Halos are made when souls leave their companies and ascend to the Clouds Over the last year, a new breed of deal structure has emerged in AI: an alternative to acquisitions and hiring that shares traits of both yet isn’t quite either. Companies like Inflection, Character AI, Adept, Covariant and most recently Windsurf have used this new structure in a common pattern. A core team from the startup–usually including the founders and research team–are hired by a company in ta

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