Venture capitalists invest in startups to benefit from the returns of the sale in future. Big Tech, these days, do not buy startups but do aquihiring the promising AI teams. They are after the most valuable manpower talent and would like to avoid anti-trust scrutiny by leaving behind business operations. It is a way to eliminate competition economically.
Microsoft acquired Inflection AI’s 70-strong team in 2024. Meta bought a 49 per cent stake in Scale AI for $14.3 billion and employed its CEO Wang to head Superintelligence Labs division. Google paid $2.4 billion for the senior leadership team and licensing rights of Windsurf, an AI coding assistant.
Acquihiring is not a new phenomenon. Over a decade big tech firms paid a few million dollars to hire talented engineers and product teams from startups leaving their investors with modest or no returns. The strategy was implemented more after the race for generative AI began.
The M&A teams at tech giants are exploring all types of hybrid deals. They want the deals to work, as anti-trust regulation works against them. It is to be seen whether in future acquihiring makes markets healthier.
Leave a Reply