2024-09-02 12:21:17
There is nothing hotter in the tech space than generative AI and the startups that produce it. Big Tech has found a highly creative way to take the talent and innovation of these startups without having to buy them out.
Microsoft, Google and Amazon they know that the acquisitions they require many months of negotiations to regulate even the smallest detail and even if these are successful it may be the regulatory authorities who say “no” in the end. So all three have discovered another way to expand their presence in the magical world of artificial intelligence.
The unusual deals
As CNBC explains, one of the most typical examples of what is happening lately is the unusual agreement that Google signed with Character.ai – one of the most dynamic generative AI startups.
Under the deal, the online giant will hire the startup’s founder and more than 1/5 of its workforce, while securing a license to use its technology. It looks like a buyout, but the deal is structured so that it isn’t. Google wasn’t the first to take this approach.
Microsoft laid the groundwork in its deal with Inflection. A similar deal followed, whereby Amazon acquired Adept’s talent and technology, without again acquiring it.
Dodging regulators, tripping up… Congress?
It’s a new playbook that limits regulators’ ability to control and clamp down, provides an outlet for AI startups struggling to make money, and allows megacaps to gather the talent needed in the AI race.
But as CNBC points out, while tech giants may think they’ve managed to avoid regulatory scrutiny, they may be playing with fire.
And this is because several deputies and senators in Congress have realized that such agreements are increasing and have put them under their own microscope. They see it as beneficial to Big Tech and startup founders, but detrimental to shareholders and employees. It is possible that very soon everyone will be asked to give explanations for the pseudo-acquisitions.