In AI acquisitions, a startup's underlying technology is less important than its "workflow proximity." Atlassian's AI head advises buyers to assess how deeply a tool is integrated into a user's fundamental daily tasks. A tool central to a core workflow is far more valuable and defensible than a specialized, peripheral one.

Instead of building a walled-garden AI, the Zed IDE created the Agent Client Protocol (ACP), allowing any coding agent to integrate. This 'Switzerland' strategy, modeled after the Language Server Protocol, lets Zed benefit from all AI innovation rather than competing against it, even attracting competitors like JetBrains to adopt the standard.

Counter to the adage that "startups shouldn't buy startups," Cursor successfully uses M&A as a core recruiting strategy. They acquire small, talented teams working on complementary problems, viewing acquisitions as a way to onboard the best people who happen to already be working on their own companies.

During the uncertain regulatory review of its Adobe acquisition, Figma's leadership kept its "foot on the gas." Because an acquirer cannot direct a company's activities pre-close, Figma continued executing its independent roadmap, ensuring it remained strong whether the deal succeeded or failed.

Widespread adoption of AI coding tools like Cursor dramatically increases code output, shifting the primary development bottleneck from writing to reviewing. This creates a market for collaboration tools like Graphite and drives consolidation as platforms race to own the end-to-end developer loop.

While starting with a focused editor, Cursor's CEO sees a larger opportunity to become the single AI coding provider for its customers. This involves a deliberate multi-product strategy to build a "bundle" of tools that addresses the entire software development lifecycle, from individual coding to team collaboration, creating a powerful ecosystem.

Creating a basic AI coding tool is easy. The defensible moat comes from building a vertically integrated platform with its own backend infrastructure like databases, user management, and integrations. This is extremely difficult for competitors to replicate, especially if they rely on third-party services like Superbase.

Faced with growing competition in AI coding assistants, Microsoft's GitHub is positioning itself as the central hub. By becoming the 'Agent HQ' where developers can manage and deploy multiple competing agents, GitHub ensures its platform's growth regardless of which agent wins.

For certain acquisitions like Poker, IFS deliberately avoids full integration to retain the target's agile, entrepreneurial culture. Instead, they use product connectors and provide access to parent company resources, allowing the startup to maintain its dynamism while leveraging scale.