Acqui-Hiring: The strategic shortcut to AI talent and innovation

‏Hiring

By Maneesh Bhandari 

The word ‘Acqui-Hire’ has become a buzzword in the AI world, driven by soaring demand for talent and the rapid pace of innovation. As niche AI skills remain scarce, acqui-hiring has emerged as a strategic shortcut—enabling companies to swiftly onboard ready-made teams with deep expertise. This approach helps bypass the time-consuming and competitive process of individual hiring, while also reducing the uncertainties of organic team-building. By acquiring fully-formed AI teams, companies can accelerate innovation, shorten time-to-market, and stay ahead in a field where speed is everything.

The recent wave of global acquisitions points towards the trend of ‘Acqui-Hiring’ and the benefits of it. Meta acqui-hired talent from Scale AI, Microsoft’s $650M acqui-hire of Inflection AI, and Snowflake picking up Neeva’s team are some of the prominent M&A deals in the space. This global trend is fast catching on in India, especially as India’s AI market is growing rapidly. A report by Milliplex projects India’s AI market to reach $7.8 billion by the end of 2025, with a compound annual growth rate (CAGR) of 20.2%. By 2035, AI is estimated to add over $950 billion to India's economy.

India’s booming AI ecosystem is fuelled by investor frenzy and the ease of starting new ventures. This has led to a massive surge in demand for skilled AI engineers, data scientists, machine learning experts, and researchers. However, these are expensive to recruit through traditional hiring channels. Businesses have realised that it is important to find a talented team that works well together. While initial acquisition costs might seem high, the long-term benefits of acquiring ready-made skilled teams, and potentially their IP, can outweigh the ongoing costs and uncertainties of traditional recruitment and R&D, thus proving to be cost-effective in the long run.

That’s one reason why early-stage startups specialising in AI niches are getting snapped up even at the pre-product stage. We are already seeing this trend play out in India, where larger corporates like TCS, NIIT, and CleverTap are leading the charge. The trend reflects a shift from independent AI growth to strategic acquisitions, as firms seek specialised solutions to enhance productivity and innovation. In May 2025, Tiger Global-backed CleverTap snapped up rehook.ai, a Y Combinator-incubated startup. Rehook.ai offers automation tools for managing promotions, loyalty programmes, and referrals, capabilities that now bolster CleverTap’s AI-driven customer engagement suite. Persistent Systems acqui-hired Arrka in September 2024 to advance data privacy and AI-driven business transformation. However, some pioneers saw the opportunity much earlier. Haptik acqui-hired AI-led US enterprise Convrg in 2019 to expand its North American presence. Clearly, acqui-hires are emerging as both a talent strategy and a viable exit route in this new AI-first world.

This also helps the startup ecosystem, as not all companies are able to either become profitable or raise funds. In that case, getting acqui-hired in a high-growth company enables them to keep their team together, continue building their dreams, and also receive financial support/exit. The financial exit may vary depending on how valuable their team or the product/IP they’ve built is to the buyer. The founders can access larger capital and not have to worry about raising money or building distribution, instead focusing on their core competency, which may be to build good technology/products.

Most companies go for capability-driven acqui-hires to bring in a ready team with deep expertise in AI domains, along with any proprietary algorithms, models, or data they may have developed. Such acqui-hires are structured with salary hikes, and founders receive retainer bonuses to keep the team together, as well as ESOPs in the acquiring entity. Product-led acqui-hires are not as common in India, but if the acquiring company finds a good team with relevant products/features that can be integrated into its existing offerings, they are willing to value the product too, although not as much as they value a viable business. This can lead to a faster go-to-market for a specific AI capability.

The recent Google-Windsurf-Cognition saga exemplifies this trend. OpenAI’s $3 billion bid to acquire Windsurf, an AI coding startup with $100 million in annual revenue, collapsed due to tensions over Microsoft’s IP access. Google swiftly hired Windsurf’s CEO Varun Mohan, co-founder Douglas Chen, and key researchers for $2.4 billion, securing non-exclusive tech licensing. Days later, Cognition Labs, known for its AI coding agent Devin, acquired Windsurf’s remaining IP, products, and 250-strong team, ensuring financial participation and accelerated vesting. This deal shows how acqui-hires allow tech giants to cherry-pick talent and tech while avoiding antitrust scrutiny by not taking controlling stakes.

We have seen AI disruption in the BPO sector as well, with Capgemini’s landmark $3.3 billion acquisition of WNS, a move that underscores how critical AI and SaaS have become in the sector’s future. The Capgemini-WNS deal is likely to strengthen sector-focused BPO services and enable faster adoption of AI-led delivery models.

Acqui-hires are redefining the AI race, offering talent acquisition, IP access, and regulatory agility. For tech giants, they fast-track innovation; for startups, they ensure survival and financial exits. As India’s AI and BPO sectors evolve, and with regulatory scrutiny intensifying, acqui-hires will shape AI competition, balancing opportunity with the risk of market dominance.

(By Maneesh Bhandari, Co-Founder and CEO of Growthpal, a M&A deal sourcing platform.)

Views are personal and do not represent the stand of this publication.