The “license & lift” structure has become the preferred M&A playbook for AI talent acquisition. Here’s exactly how these deals work and why they’re so effective.
The Deal Structure
Traditional M&A vs License & Lift:
| Traditional M&A | License & Lift |
|---|---|
| HSR Act filing required (>$119M) | No HSR filing (no change of control) |
| FTC/DOJ review (30+ days minimum) | No FTC/DOJ pre-approval needed |
| Second request possible (6-12 months) | Hiring = employment law (not antitrust) |
| Public scrutiny and disclosure | License = commercial transaction |
| Potential blocking or conditions | Limited public disclosure |
| Risk: Deal blocked or unwound | Result: Same outcome, different path |
The Legal Reality
Antitrust law focuses on “change of control.” License & Lift achieves the same economic outcome without triggering that threshold.
This is regulatory arbitrage at scale.
Case Studies: How the Deals Actually Work
Microsoft → Inflection (~$650M)
- Perpetual license to Inflection’s technology
- Mustafa Suleyman → Microsoft AI CEO
- Key team moves to Microsoft
- Result: OpenAI hedge achieved
Google → Character AI (~$2.7B)
- Non-exclusive license to Character’s tech
- Noam Shazeer returns to Google
- Character continues as separate entity
- Result: Consumer AI talent secured
Meta → Scale AI (~$14B, 49% stake)
- 49% stake (just under control threshold)
- Alexandr Wang → Chief AI Officer role
- Data labeling infrastructure access
- Result: AI training pipeline locked in
The Numbers
| Metric | Value |
|---|---|
| Total L&L value | $40B+ |
| Major deals closed | 8+ |
| Deals blocked | 0 |
| Frontier researchers globally | ~10K |
| Consolidating to | 5-7 players |
| Talent concentration | 90% |
Why It Works
For acquirers:
- Get the talent (the actual scarce resource)
- Get functional IP control via perpetual license
- Neutralize competitive threat permanently
- Avoid 6-12 month regulatory review
For founders:
- Economics often match full acquisition
- Team gets hyperscaler resources to ship
- Avoid the grind of competing against unlimited capital
The insight: Same economic outcome, different legal structure. That’s the entire playbook.
This is part of a comprehensive analysis. Read the full analysis on The Business Engineer.
More Resources
