Google DeepMind pays up to $90 million for Contextual AI talent in licensing deal

Google DeepMind hires staff from Contextual AI in licensing deal, source says

Google DeepMind is reportedly acquiring over 20 researchers and licensing technology from AI startup Contextual AI for $80 million to $90 million. This move follows Alphabet's strategy of talent acquisition through licensing deals, similar to past agreements with Windsurf and Character.AI. Alphabet's AI research subsidiary, Google DeepMind, has agreed to recruit more than 20 researchers from AI startup Contextual AI and license its technology, a person familiar with the matter told Reuters on Tuesday. Alphabet paid between $80 million and $90 million to Contextual as part of the agreement, and Contextual's co-founder and CEO Douwe Kiela ⁠is ⁠among those joining DeepMind, according to the source. Google declined to comment and Contextual did not immediately respond to a request for comment. The agreement, first reported by Bloomberg News, is the latest move by the Google parent to strike a licensing deal to acquire talent. Last year, it paid $2.4 billion in license fees as part of a deal to ⁠use some of AI code generation startup Windsurf's technology under non-exclusive terms and to hire several key staff. In 2024, Google signed ⁠a licensing deal with Character.AI that granted it a non-exclusive license to the chatbot maker's large language model technology. Acquihires, in which major tech companies pay large sums to secure the talent and technology of promising startups without formally acquiring them, are increasingly viewed by antitrust regulators as an attempt to evade merger rules. Unlike acquisitions that would give the buyer a controlling stake, these deals do not require a review by U.S. antitrust regulators. In December, Nvidia agreed to license chip technology from Groq and to ⁠hire its CEO, without buying the startup. Companies' efforts to sidestep U.S. antitrust scrutiny through tactics such as acquihires are a "red flag," Acting Assistant Attorney General Omeed Assefi told Reuters in March. Contextual AI raised $80 million in a Series A funding round in 2024, led by venture capital firm Greycroft and existing investors, including Bain Capital Ventures and Lightspeed.

Google DeepMind Pays Up To $90 Million To Hire Contextual AI Talent As Antitrust Scrutiny Grows: Report -

Google DeepMind Expands AI Talent Push Contextual AI co-founder and CEO Douwe Kiela is among the researchers joining Google DeepMind as part of the arrangement, Reuters reported on Tuesday, citing a person familiar with the matter. Rather than fully acquiring the startup, Google is licensing some of its technology while bringing key personnel into the company. Google and Contextual AI did not immediately respond to Benzinga's request for comments. Contextual AI raised $80 million in a 2024 Series A funding round led by Greycroft, with participation from Bain Capital Ventures and Lightspeed. Big Tech Increasingly Turns To Acquihires The agreement marks the latest example of a growing acquihire trend in Silicon Valley, where large technology firms secure startup talent and intellectual property without pursuing outright acquisitions, the report said. Last year, Alphabet reportedly paid $2.4 billion in licensing fees tied to a deal involving AI coding startup Windsurf, while also recruiting several members of its team. Google also entered a licensing arrangement with Character.AI in 2024, gaining access to the chatbot startup's large language model technology under non-exclusive terms. Antitrust Concerns Around AI Deals Intensify These transactions are drawing increased scrutiny from regulators because they often avoid the formal review process tied to traditional mergers and acquisitions. In March, the Acting Assistant Attorney General Omeed Assefi described such efforts to bypass antitrust oversight as a potential "red flag" in a statement to the publication. Price Action: Alphabet Class A shares fell 2.34% to close at $387.66 on Tuesday, while Class C shares declined 2.09% to $384.90, with both shares inching slightly higher in after-hours trading, according to Benzinga Pro. According to Benzinga Edge Stock Rankings, GOOG ranks in the 95th percentile for Quality, with the stock showing a positive trend across short, medium and long-term time frames. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo Courtesy: Markus Mainka on Shutterstock.com Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Google DeepMind hires staff from Contextual AI in licensing deal, source says

May 19 (Reuters) - Alphabet's AI research subsidiary, Google DeepMind, has agreed to recruit more than 20 researchers from AI startup Contextual AI and license its technology, a person familiar with the matter told Reuters on Tuesday. Alphabet paid between $80 million and $90 million to Contextual as part of the agreement, and Contextual's co-founder and CEO Douwe Kiela is among those joining DeepMind, according to the source. Google declined to comment and Contextual did not immediately respond to a request for comment. The agreement, first reported by Bloomberg News, is the latest move by the Google parent to strike a licensing deal to acquire talent. Last year, it paid $2.4 billion in license fees as part of a deal to use some of AI code generation startup Windsurf's technology under non-exclusive terms and to hire several key staff. In 2024, Google signed a licensing deal with Character.AI that granted it a non-exclusive license to the chatbot maker's large language model technology. Acquihires, in which major tech companies pay large sums to secure the talent and technology of promising startups without formally acquiring them, are increasingly viewed by antitrust regulators as an attempt to evade merger rules. Unlike acquisitions that would give the buyer a controlling stake, these deals do not require a review by U.S. antitrust regulators. In December, Nvidia agreed to license chip technology from Groq and to hire its CEO, without buying the startup. Companies' efforts to sidestep U.S. antitrust scrutiny through tactics such as acquihires are a "red flag," Acting Assistant Attorney General Omeed Assefi told Reuters in March. Contextual AI raised $80 million in a Series A funding round in 2024, led by venture capital firm Greycroft and existing investors, including Bain Capital Ventures and Lightspeed. (Reporting by Juby Babu in Mexico City and Kenrick Cai in San Francisco; Editing by Shilpi Majumdar and Edmund Klamann)

Google DeepMind hires staff from Contextual AI in licensing deal, Bloomberg News reports

May 19 (Reuters) - Alphabet's AI research subsidiary, Google DeepMind, has finalized a deal to recruit more than 20 researchers from AI startup Contextual AI and license its technology, Bloomberg News reported on Tuesday, citing people familiar with the matter. DeepMind has agreed to pay about $100 million to Contextual as part of the agreement, while Contextual's co-founder and CEO Douwe Kiela is among those joining DeepMind, according to the report. Google and Contextual did not immediately respond to Reuters' requests for comment. The potential agreement is the latest move by the Google parent to strike a licensing deal to acquire talent. Last year, it paid $2.4 billion in license fees as part of a deal to use some of AI code generation startup Windsurf's technology under non-exclusive terms and hire several key staff. In 2024, Google signed a licensing deal with Character.AI that granted the search engine giant a non-exclusive license to the chatbot maker's large language model technology. Acquihires, where major tech companies pay large sums to secure the talent and technology of promising startups without formally acquiring them, are increasingly being viewed by antitrust regulators as an attempt to evade merger rules. Unlike acquisitions that would give the buyer a controlling stake, these deals do not require a review by U.S. antitrust regulators. In December, Nvidia also agreed to license chip technology from Groq and hire its CEO, without buying the startup. Companies' efforts to sidestep U.S. antitrust scrutiny through tactics such as acquihires are a "red flag," Acting Assistant Attorney General Omeed Assefi told Reuters in March. Contextual AI raised $80 million in a Series A funding round in 2024, led by venture capital firm Greycroft and existing investors, including Bain Capital Ventures and Lightspeed. (Reporting by Juby Babu in Mexico City; Editing by Shilpi Majumdar)