From acquisitions by OpenAi and DoorDash to Microsoft adopting Google’s AI agent protocol, here’s the news that grabbed us this week
More developments at OpenAi this week. The company announced it is to buy Windsurf - formerly Codeium - for about $3 billion, reflecting a trend towards consolidation in the AI development tools sector. It also reflects OpenAI’s recent strategy to boost different segments of its AI products through acquisition, this includes buying Global Illumination, a New York-based startup focused on AI-driven creative tools and digital infrastructure, in 2023, and buying search and database analytics startup Rockset last year. If approved, the Windsurf buy will be OpenAI’s largest acquisition to date.
More fundamentally, the company this week confirmed it is abandoning plans to transform into a for-profit business. OpenAI’s non-profit arm will continue to control the business. A letter to employees from CEO Sam Altman said: “We made the decision for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware. We look forward to advancing the details of this plan in continued conversation with them, Microsoft, and our newly appointed nonprofit commissioners. OpenAI was founded as a nonprofit, is today a nonprofit that oversees and controls the for-profit, and going forward will remain a nonprofit that oversees and controls the for-profit. That will not change.”
The for-profit part of the business - the part which has enabled Altman to raise money - will transition to a public benefit corporation (PBC). This is a US for-profit corporate structure that legally requires companies to pursue both:profit for shareholders and a stated public benefit. The non-profit will be the largest shareholder of the PBC.
In truth, OpenAI's plan to convert to a for-profit business would probably have been fraught with challenges. Not least there was the prospect of a protracted fight with OpenAI co-founder and early funder Elon Musk who fell out with Altman and then accused him of betraying the organization's founding mission to develop artificial general intelligence (AGI) for the benefit of humanity, rather than for profit. In a lawsuit filed in February 2024, Musk alleged that OpenAI's transformation into a for-profit entity and its close partnership with Microsoft represent a "stark betrayal" of the original agreement. He also asserted that OpenAI's actions have deviated from its original commitment to transparency and open-source principles.OpenAI also faced regulatory and legal pressure over the plan, with concerns that it might violate charitable trust laws. It could well have caused another crisis in corporate governance - let’s not forget that Altman was ousted for a while in 2023, to say nothing of the potential for community and employee backlash.
For product managers and developers OpenAI’s commitment to a continuing non-profit status means there is likely to be a stronger focus on ethical use, safety and transparency, and less risk of sudden pivots to monetise products. It should also mean clearer guard rails on use cases and greater confidence that OpenAI models will be developed responsibly.
US online food delivery business DoorDash is to buy UK-founded rival Deliveroo in an all-cash deal valued at £2.9 billion ($3.9 billion). Deliveroo shareholders will receive 180 pence per share, a 29% premium on Deliveroo’s share price prior to the offer. Deliveroo operates in nine countries, with the UK and Ireland accounting for 59% of its 2023 business, and the acquisition will expand DoorDash's operations to over 40 countries. According to the Financial Times, Deliveroo had been struggling since going public four years ago, and the acquisition underlines concern about the UK's ability to retain its tech companies and the challenges UK-based tech companies face in public markets.
It’s official - Microsoft finally shut down Skype this week. As we covered here, When a product doesn’t fit: Skype’s decline inside Microsoft, Skype users are being moved to Teams, and Skype’s downfall is an apt illustration of how often big tech companies struggle to integrate acquisitions.
In his keynote at IBM’s annual conference Think 25, CEO Arvind Krishna outlined the company’s strategy for embedding AI into enterprise operations. He introduced tools to help customers create their own agents and highlighted the effectiveness of smaller, specialised AI models over large, general-purpose ones. IBM has a $6-billion book of business for generative AI, he said, and it is growing.
Microsoft announced it is supporting Google Agent2Agent (A2A) open protocol to enable AI agents to communicate and collaborate effectively. It’s support that should help to unify development standards, speed up development of multi-agent systems and simplify integration of AI agents into workflows.
Figma doubled its product offering with the launch of four new products at its annual Config conference in San Francisco this week - Figma Make, Figma Sites, Figma Draw, Figma Buzz. Posting on LinkedIn, CPO Yukhi Yamashita said: ”With these additions, we hope everyone can contribute meaningfully to the design and development process. AI enables anyone to quickly visualize ideas and make them real. Our new tools help designers push the limits of their craft, to build beautiful, differentiated products.”
Spotify this week refreshed its app with a big update that gives users more control over music discovery, playlist management, and listening preferences. The move also reflects Spotify's response to a recent US federal court ruling that found Apple had violated a 2021 injunction in the Epic Games v Apple antitrust case, which means apps can now direct users to external websites for purchases or subscriptions and bypass Apple’s in-app payment system.
Netflix is also rolling out an update, reportedly its most significant redesign in more than a decade. It aims for an improved and simplified user experience, streamlined content discovery, and reduced decision fatigue. According to Netflix CPO Eunice Kim: “We’ve been working on this and testing the new experience since last year, and very excited about the feedback we’ve seen from members who do tell us that they prefer the new experience… We also do a lot of direct consumer research, talking to our members about the experience they’re having, and that helps us figure out what’s going well and what could be improved."
