It’s Not What You Acquire, It’s Who You Acquire

When tech giants announce acquisitions, headlines usually focus on billion-dollar valuations or breakthrough technologies. The real story, however, is increasingly about talent. Companies like Google and Microsoft are turning to ‘Acqui-hiring’, the practice of acquiring startups or teams primarily for their talent rather than their products or clients. This shift reflects a broader reality: in today’s innovation economy, talent is the new currency.

While press releases often emphasize products or technologies, S&P Global Market Intelligence’s Headcount Analytics provides a clearer, more granular perspective. Sudden spikes in role-level headcount may signal the absorption of specialized skills, while sharp declines at the acquired company can mark talent migration into the acquirer’s structure.

By tracking workforce size, role distribution, and seniority levels, headcount data uncovers the strategic narratives behind acqui-hires. It can show whether a deal was about technology, leadership, or the targeted acquisition of expertise, and highlights the ways in which tech companies are investing in the skills needed to fuel the next wave of Artificial Intelligence (AI), Augmented Reality (AR), and digital assistants.

This article examines three different acqui-hiring scenarios.

Google’s Acqui-hire of Raxium (2022)

In March 2022, Google formally acquired Raxium, a startup specializing in augmented and virtual reality technologies. The deal was widely seen as a strategic move to strengthen Google’s portfolio in immersive hardware, including Project Iris, its next-generation AR headset.

What the headcount data shows: Around the time of acquisition, Raxium’s workforce peaked at just under 50 employees, before settling to a stable base of 30–33 over the following years. That trajectory is consistent with a talent integration play—key specialists migrating into Google’s hardware division while the company maintained only a lean shell.

The team composition was heavily weighted toward hardware, engineering, and R&D, with virtually no sales, marketing, or customer-facing roles. This strongly suggests that Raxium was not a company building a product for scale, but a lab-style research group assembled around a specific display technology. By acquiring it, Google compressed years of specialist hiring into a single transaction, redeploying scarce technical expertise into its AR hardware roadmap.

Raxium can be seen as a great example of an acqui-hire. The headcount data makes clear that Google’s focus was not on commercial infrastructure but on absorbing a compact, high-value team of hardware innovators to accelerate its push into AR.

Inflection AI Talent Joins Microsoft (2024)

In March 2024, Microsoft reached a $650 million deal with Inflection AI. The agreement gave Microsoft licensing rights to Inflection’s models and brought over most of its team, including the co-founders, who now lead Microsoft AI. The move was framed as both a technology play and a major talent infusion, strengthening products like Copilot and Bing Chat.

What the headcount data shows: Inflection’s workforce scaled rapidly to around 75 employees by early 2024 before collapsing to just over 20 in the months after the Microsoft deal, a reduction of nearly two-thirds in a single quarter. The contraction was concentrated in mid-2024, followed by a slow rebuild through late 2024 and into 2025, with headcount stabilizing near 60 by mid-2025.

The role mix is consistent throughout: heavy in engineering, product, and research, with minimal investment in sales or marketing. Leadership roles remained intact even through the contraction, signaling that the company’s value lay in its senior technical expertise rather than a commercial footprint.

Inflection AI’s trajectory highlights how acqui-hires can look in practice: a sharp reset to a specialist nucleus, followed by measured rehiring around core technical talent. The data confirms Microsoft’s focus was not on scaling Inflection as a business, but on absorbing a compact team of experts to accelerate its AI strategy.

Google and Character.ai (2024) – A Reverse Acqui-hire

In October 2024, Google executed a strategic reverse acqui-hire involving Character.ai, which included a significant financial commitment and the re-hiring of the startup's co-founders and key personnel.

Reverse acqui-hires give large companies direct access to the brainpower and the tech behind tomorrow’s breakthroughs, without purchasing the whole startup. Instead of an acquisition, the top talent (often founders) join the larger company while the technology is licensed. This model is rapidly gaining traction in AI, where demand for top talent is at an all-time high.

What the Headcount Data Shows:

Character.ai grew rapidly from under 100 employees in early 2023 to 191 in August 2024. Immediately after the Google deal, headcount fell sharply, dropping from around 165 in September 2024 to about 135 by December. By early 2025, the company stabilized at roughly 150 employees.