In today’s ultra-competitive environments, organizations recognize that their true wealth no longer lies solely in technology or capital, but in the talent that drives them. Recruiting an influential executive from a competitor to attract their former colleagues or buying a start-up for the sole purpose of acquiring its teams are practices that are becoming commonplace today.
In the technology sector, this strategy has a name: “acqui-hire.” It’s not so much about acquiring a product or service as it is about getting hold of the brains that designed them. In recent years, most of the big deals in the industry have been made with this in mind.
According to a former deputy attorney general of the US competition authority, these acquisitions also aim to circumvent the regulatory reviews imposed on large takeovers. Large transactions often face regulatory hurdles, but acquiring smaller players eliminates potential future competitors at the source.
Alphabet is no stranger to this practice. Last month, the group paid $2.4bn to acquire the AI start-up Windsurf. Officially, no stake was acquired, but Alphabet gained the licensing rights… and key employees. The same logic was applied last year, when the founders of Character.AI joined Alphabet. Microsoft also did the same with Inflection AI to recruit its founder.
More notoriously, and undoubtedly the most expensive recruit in history, Meta spent $14.8bn to acquire Scale AI, allowing its CEO, Alexandr Wang, to become Meta’s chief AI officer.
Mark Zuckerberg is making waves in Silicon Valley with his list of the best engineers in California, whom he is offering extraordinary salaries. To counter this practice, OpenAI has adopted one of the most popular levers in tech: stock option compensation. This is a way to motivate employees ahead of a possible IPO that would pay them a windfall.
Not just tech
In the US banking sector, aggressive recruitment campaigns are in full swing. The hiring of Vis Raghavan is central to Citi’s new strategy, which seeks to boost revenues in its investment banking division. Higher-margin activities, such as mergers and acquisitions, are naturally becoming a priority battleground, and Citi is trying to regain a foothold by stepping up its hiring.
By poaching the head of JPMorgan’s global investment banking division, Citi aims to redefine its competitive advantage. Vis Raghavan has already brought at least ten senior investment bankers with him. Veterans from Goldman Sachs have also joined the ranks.
However, competition is not standing on the sidelines. To counter this brain drain, JPMorgan has recruited 300 employees since 2024, including a large number of senior staff.
The strategy is paying off: investment banking revenues jumped 13% at Citi in Q2, well above the modest increases seen at its competitors. The bank also gained market share this year, a gain that Vis Raghavan attributes directly to the hiring spree.
Over the past decade, we have seen a trend toward improving working conditions to attract and, above all, retain employees. But oligopolistic sectors are quick to pull out all the stops and resort to more aggressive practices to take the lead when competition becomes a race.
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