Is Startups Buying Legacy Giants The Next Big AI Power Move? (Or Just AOL/Time Warner 2.0)
Context: I’ve been watching a shift in how deals get done in 2025. Strong companies right now can go out and buy AI talent at insane prices because the market rewards them for it. But here’s what’s more interesting to me—what happens if you’re not one of those companies? I think we’re about to see the reverse: AI-first startups buying legacy businesses for their distribution, brand, or data. This is the “GBO” (growth buyout) playbook we’ve been talking about for years, AI just speeds it up dramatically.
Market Signal:
AI startups may start acquiring legacy companies instead of the other way around.
Distribution and brand are becoming key acquisition targets.
A Perplexity–Chrome deal could be a new form of “product-led SPAC,” where you build a tech story and team, then leverage it (and public market hype) to buy assets—no need to prove profitability first.
The risk? We’ve seen this movie before, AOL/Time Warner all over again, where inflated valuations buy “real” businesses on a synergy story.
Takeaways:
This could be the next evolution of SPACs, led by product and tech narrative instead of balance-sheet strength.
AI is flipping M&A dynamics on their head, rewarding startups that can execute GBOs.
The line between visionary deal-making and bubble-era overreach is going to get blurry fast.