"Show Me the Money": Founders, Loyalty, and the New Rules of the AI Gold Rush
What Windsurf’s double acquisition reveals about founder loyalty and employee trust in Silicon Valley’s new free agency era
Loyalty.
By now you've likely heard the news: Windsurf was acquired—not once, but twice—in a single week.
If you somehow missed the headlines, here's the quick rundown:
Last week, Cognition AI, the startup best known for its AI-powered coding assistant, announced its acquisition of Windsurf.
This came on the heels of Google's controversial $2.4 billion deal the previous Friday, acquiring Windsurf’s top executives and licensing its core technology, while leaving the company itself and most of its employees behind.
Loyalty.
The Windsurf saga—two rapid-fire acquisitions, executives parachuting out, employees left stranded—isn't just another juicy Silicon Valley story. It exposed a deeper fracture in how we think about commitment and trust in startups.
At the center of controversy is Windsurf’s CEO, Varun Mohan, accused of negotiating deals that richly benefited himself and an inner circle while leaving loyal, early employees out in the cold.
It must be noted that Varun faced limited options: OpenAI’s acquisition attempt had already collapsed due to Microsoft’s contractual IP entitlements, which left Windsurf effectively “unacquirable” by any major player.
You've probably heard multiple perspectives by now, and I don't pretend to know all the details. Passing judgment on Varun’s decision isn't my intent, nor is it my place as a venture capitalist. But I do think we should examine how the incentive structures—not just the individual choices—shape these outcomes.
Loyalty.
Today’s AI startup ecosystem mirrors professional sports more closely than many realize.
Consider college basketball: In 2025, over 2,300 players entered the transfer portal—nearly half of all men's college basketball players. Five years earlier, it was fewer than 1,000.
Silicon Valley reflects a similar transformation, where top AI researchers and engineers are entering the tech transfer portal everyday.
The dopamine rush of perpetual free agency is more enticing the satisfaction of sticking with one team. And the potential of overnight wealth creation, especially during the current AI gold rush, encourages founders and employees to maximize short-term individual returns rather than build enduring value.
But this dynamic becomes troubling when it fractures the unspoken social contract between founders and their teams.
Founders are uniquely privileged to convince top talent to spend their most valuable years helping build their own visions and dreams. Often, this means asking them to walk away from higher salaries or more secure paths—anchored only by the promise of equity and long-term upside. When that contract breaks, it undermines the trust that startups are built on.
In Windsurf’s case, the Google licensing deal and Cognition’s follow-on acquisition ultimately delivered partial payouts and preserved jobs for remaining employees—but only after lots of uncertainty and backlash. The precedent is slippery: if future founders believe they can extract value via licensing or team lift-outs without a full exit, it could normalize a model where employees are last to benefit. Similarly, when tech giants like Facebook poaching AI talent, it underscores why employee loyalty has waned so dramatically in the AI era.
Loyalty.
AI’s free agency era is here.
Imagine a 22-year-old OpenAI researcher yelling “SHOW ME THE MONEY!”—not at Tom Cruise, but at Mark Zuckerberg, mid-DM, while wearing a Meta headset.
My friends at TBPN have fully embraced the “AI free agency” era—posting real-time updates of top researcher moves on Twitter like they’re Shams Charania reporting blockbuster trades. All that’s missing is a Woj bomb and an Arxiv highlight reel.
But honestly—why should employees stay loyal when founders are the first to jump ship for a bigger payday?
The problem isn’t just individual—it’s structural. If a founder can cash out by licensing IP instead of building the company to a real exit, the system doesn’t just permit it. It incentivizes it.
Silicon Valley’s game of musical chairs now includes everyone, even founders of billion-dollar startups with hundreds of employees and nine figures in the bank. The same founders who once sold a “lifelong mission” are now stepping away the moment a better seat opens up.
In the race to AGI, careers have become liquid assets—negotiable, transferable, and always up for sale to the highest bidder. Founders and employees alike are just playing the market.
Still, I believe loyalty—especially from founders—is essential if Silicon Valley wants to preserve what once made it special.
But loyalty won’t return through nostalgia or wishful thinking. It requires structural change: aligned incentives, real employee protections, and deal terms built on transparency, not clever loopholes.
Without that, we risk losing the collaborative spirit and shared upside that once set this industry apart.