Jul 02, 2024
The AI industry is heating up, and Big Tech is on the hunt. A close watch over every step, or rather buy, is stringent antitrust regulations that has barred them from buying up start-ups like they used to earlier. Instead, it’s the very clever tactic of using a “reverse acquihire” that allows these tech giants to snap up talent and technology without raising red flags.
Here's what is happening
At a recent tech conference, Reid Hoffman, cofounder of LinkedIn and an investor in AI start-up Inflection called out the hiring of Inflection's team by Microsoft as a pattern maker for future AI deals, about which he was correct.
The latest is Amazon's hiring of most of the team behind AI start-up Adept and licensing of its technology. It allows Amazon to tap Adept's expertise without formally acquiring the company and its potential antitrust scrutiny.
Read more: Apple to announce Google Gemini deal this fall
Adept, which raised $400 million from top investors, was struggling to keep up with the costly demands of building leading AI models. With its funding running out, it was looking to sell; Amazon seized the opportunity and hired 60% of Adept’s staff, licensing its technology to help speed up in-house AI roadmap.
This "reverse acquihire" strategy is a clever way for Big Tech to swallow AI start-ups without getting caught. It can hire talent and license technology to side up the adversarial gaze of antitrust regulators.
This works By hiring talent and licensing technology, they can avoid the scrutiny of antitrust regulators. It's a win-win for both parties: the start-up keeps its technology alive, and Big Tech plugs right into the most recent AI innovations at reduced costs.
