US Senators Scrutinize Big Tech's 'Acquihire' Strategy in AI Talent Acquisition

US senators call out big tech's new approach to poaching talent, products from smaller AI startups

In the race to stay ahead in artificial intelligence, the biggest technology companies are swallowing up the talent and products of innovative AI startups without formally acquiring them. Now three members of the US senate are calling for an investigation. San Francisco-based Adept announced a deal late last month that will send its CEO and key employees to Amazon and give the ecommerce giant a license to Adept's AI systems and datasets. Some call it a "reverse acqui-hire." Others call it poaching. Whatever it's called, it's alarming to some in Washington who see it as an attempt to bypass U.S. laws that protect against monopolies. "I'm very concerned about the massive consolidation that's going on in AI," US senate Ron Wyden, an Oregon Democrat, told The Associated Press. "The technical lingo is 'up and down the stack'. But, in plain English, a few companies control a major portion of the market, and just concentrate - rather than on innovation - trying to buy out everybody else's talent." So-called "acqui-hires," in which one company acquires another to absorb talent, have been common in the tech industry for decades, said Michael A. Cusumano, a business professor at the Massachusetts Institute of Technology. But what's happening in the AI industry is a little different. "To acquire only some employees or the majority, but not all, license technology, leave the company functioning but not competing, that's a new twist," Cusumano said. A similar maneuver happened at the AI company Inflection in March when Microsoft hired its co-founder and CEO Mustafa Suleyman to head up Microsoft's consumer AI business, along with Inflection's chief scientist and several of its top engineers and researchers. That arrangement has already attracted some scrutiny from regulators, particularly in Europe. Wyden also wants U.S. regulators to investigate the Amazon-Adept deal. He and fellow Democratic Sens. Elizabeth Warren of Massachusetts and Peter Welch of Vermont sent a letter Friday urging antitrust enforcers at the Justice Department and the Federal Trade Commission that "sustained, pointed action is necessary to fight undue consolidation across the industry." Amazon didn't immediately respond to a request for comment Friday. "What is going on here is instead of buying startups outright, big tech companies are trying a new play," Wyden said in an interview before sending the letter. "They don't want to formally acquire the companies, avoiding the antitrust scrutiny. I think that's going to be the playbook until the FTC really starts digging into these deals." DOJ and FTC officials didn't immediately respond to requests for comment on the senators' letter. President Joe Biden's administration and lawmakers from both parties have championed stronger oversight of the tech industry in recent years, likely scaring off big acquisitions that might have sailed through in earlier eras. US antitrust enforcers, for example, plan on investigating the roles Microsoft, Nvidia and OpenAI have played in the artificial intelligence boom, with the Deparment of Justice looking into chipmaker Nvidia and the Federal Trade Commission scrutinizing business partners Microsoft and OpenAI. Tech giants, including Microsoft, Amazon and Google, are trying to be conservative and not make too many acquisitions in the AI space, Cusumano said. "It seems clever. I would think, though, that they're not fooling anybody," he said. For smaller AI startups, the problem is also that building AI systems is expensive, requiring costly computer chips, power-hungry data centers, huge troves of data to train upon and highly skilled computer scientists. Adept, which aims to make AI software agents that help people with workplace tasks, said it was trying to do two things at once - build the foundational AI technology as well as the products for end users. But continuing on that path "would've required spending significant attention on fundraising for our foundation models, rather than bringing to life our agent vision," it said in a statement explaining the Amazon deal. "They may have made a decision that they have no real future and just don't have deep enough pockets to compete in this space, so they probably prefer to be acquired outright," Cusumano said. "But if Amazon is not willing or not able to do that, then this is kind of a second-best approach for them." Wyden has long taken an interest in technology, helping to write the 1996 law that helped set the ground rules for free speech on the internet. He said he generally favors a straightforward approach that encourages innovation, with guardrails as needed. But in the AI industry, he said, "companies like Microsoft, Amazon and Google, either own major parts of the AI ecosystem or they have a leg up thanks to their massive resources." John F. Coyle, a law professor at the University of North Carolina, said he believes that Amazon hiring Adept employees without buying the company is clearly a move to avoid antitrust problems. But that type of hiring isn't a "reverse acqui-hire," he said. Acqui-hires are typically face-saving moves that can be spun into success stories, Coyle said, and provide an alternative to liquidating a business. A smaller company can say it was sold to Amazon or Facebook parent Meta Platforms and spin it as a positive, for example, even if wasn't the founders' original plan. "This isn't an acqui-hire. This is a straight up poach," Coyle said of Amazon and Adept. This doesn't just happen in the tech world, he said, calling the move "a version of a very old story." In his class, Coyle said, he teaches students about a case from the 1950s involving an advertising agency in New York City. Some employees left to start a new business and poached roughly 100 others to come to work for them. "There are innumerable instances where one company went and raided another to take all their employees," Coyle said. "That existed before the acqui-hire, that is going to happen after the acqui-hire."

US senators call out Big Tech's new approach to poaching talent, products from smaller AI startups

In the race to stay ahead in artificial intelligence, the biggest technology companies are swallowing up the talent and products of innovative AI startups without formally acquiring them. Now three members of the U.S. Senate are calling for an investigation. San Francisco-based Adept announced a deal late last month that will send its CEO and key employees to Amazon and give the e-commerce giant a license to Adept's AI systems and datasets. Some call it a "reverse acqui-hire." Others call it poaching. Whatever it's called, it's alarming to some in Washington who see it as an attempt to bypass U.S. laws that protect against monopolies. "I'm very concerned about the massive consolidation that's going on in AI," U.S. Sen. Ron Wyden, an Oregon Democrat, told The Associated Press. "The technical lingo is 'up and down the stack'. But, in plain English, a few companies control a major portion of the market, and just concentrate -- rather than on innovation -- trying to buy out everybody else's talent." So-called "acqui-hires," in which one company acquires another to absorb talent, have been common in the tech industry for decades, said Michael A. Cusumano, a business professor at the Massachusetts Institute of Technology. But what's happening in the AI industry is a little different. "To acquire only some employees or the majority, but not all, license technology, leave the company functioning but not really competing, that's a new twist," Cusumano said. A similar maneuver happened at the AI company Inflection in March when Microsoft hired its co-founder and CEO Mustafa Suleyman to head up Microsoft's consumer AI business, along with Inflection's chief scientist and several of its top engineers and researchers. That arrangement has already attracted some scrutiny from regulators, particularly in Europe. Wyden also wants U.S. regulators to investigate the Amazon-Adept deal. He and fellow Democratic Sens. Elizabeth Warren of Massachusetts and Peter Welch of Vermont sent a letter Friday urging antitrust enforcers at the Justice Department and the Federal Trade Commission that "sustained, pointed action is necessary to fight undue consolidation across the industry." Amazon didn't immediately respond to a request for comment Friday. "What is going on here is instead of buying startups outright, big tech companies are trying a new play," Wyden said in an interview before sending the letter. "They don't want to formally acquire the companies, avoiding the antitrust scrutiny. I think that's going to be the playbook until the FTC really starts digging into these deals." DOJ and FTC officials didn't immediately respond to requests for comment on the senators' letter. President Joe Biden's administration and lawmakers from both parties have championed stronger oversight of the tech industry in recent years, likely scaring off big acquisitions that might have sailed through in earlier eras. U.S. antitrust enforcers, for example, plan on investigating the roles Microsoft, Nvidia and OpenAI have played in the artificial intelligence boom, with the Deparment of Justice looking into chipmaker Nvidia and the Federal Trade Commission scrutinizing business partners Microsoft and OpenAI. Tech giants, including Microsoft, Amazon and Google, are trying to be conservative and not make too many acquisitions in the AI space, Cusumano said. "It seems clever. I would think, though, that they're not fooling anybody," he said. For smaller AI startups, the problem is also that building AI systems is expensive, requiring costly computer chips, power-hungry data centers, huge troves of data to train upon and highly skilled computer scientists. Adept, which aims to make AI software agents that help people with workplace tasks, said it was trying to do two things at once -- build the foundational AI technology as well as the products for end users. But continuing on that path "would've required spending significant attention on fundraising for our foundation models, rather than bringing to life our agent vision," it said in a statement explaining the Amazon deal. "They may have made a decision that they have no real future and just don't have deep enough pockets to compete in this space, so they probably prefer to be acquired outright," Cusumano said. "But if Amazon is not willing or not able to do that, then this is kind of a second-best approach for them." Wyden has long taken an interest in technology, helping to write the 1996 law that helped set the ground rules for free speech on the internet. He said he generally favors a straightforward approach that encourages innovation, with guardrails as needed. But in the AI industry, he said, "companies like Microsoft, Amazon and Google, either own major parts of the AI ecosystem or they have a leg up thanks to their massive resources." John F. Coyle, a law professor at the University of North Carolina, said he believes that Amazon hiring Adept employees without buying the company is clearly a move to avoid antitrust problems. But that type of hiring isn't a "reverse acqui-hire," he said. Acqui-hires are typically face-saving moves that can be spun into success stories, Coyle said, and provide an alternative to liquidating a business. A smaller company can say it was sold to Amazon or Facebook parent Meta Platforms and spin it as a positive, for example, even if wasn't the founders' original plan. "This isn't an acqui-hire. This is a straight up poach," Coyle said of Amazon and Adept. This doesn't just happen in the tech world, he said, calling the move "a version of a very old story." In his class, Coyle said, he teaches students about a case from the 1950s involving an advertising agency in New York City. Some employees left to start a new business and poached roughly 100 others to come to work for them. "There are innumerable instances where one company went and raided another to take all their employees," Coyle said. "That existed before the acqui-hire, that is going to happen after the acqui-hire."

Senator calls out Big Tech's new approach to poaching talent, products from smaller AI startups

In the race to stay ahead in artificial intelligence, the biggest technology companies are swallowing up the talent and products of innovative AI startups without formally acquiring them. San Francisco-based Adept announced a deal late last month that will send its CEO and key employees to Amazon and give the e-commerce giant a license to Adept's AI systems and datasets. Some call it a "reverse acqui-hire." Others call it poaching. Whatever it's called, it's alarming to some in Washington who see it as an attempt to bypass U.S. laws that protect against monopolies. "I'm very concerned about the massive consolidation that's going on in AI," U.S. Sen. Ron Wyden, an Oregon Democrat, told The Associated Press. "The technical lingo is 'up and down the stack'. But, in plain English, a few companies control a major portion of the market, and just concentrate -- rather than on innovation -- trying to buy out everybody else's talent." So-called "acqui-hires," in which one company acquires another to absorb talent, have been common in the tech industry for decades, said Michael A. Cusumano, a business professor at the Massachusetts Institute of Technology. But what's happening in the AI industry is a little different. "To acquire only some employees or the majority, but not all, license technology, leave the company functioning but not really competing, that's a new twist," Cusumano said. A similar maneuver happened at the AI company Inflection in March when Microsoft hired its co-founder and CEO Mustafa Suleyman to head up Microsoft's consumer AI business, along with Inflection's chief scientist and several of its top engineers and researchers. That arrangement has already attracted some scrutiny from regulators, particularly in Europe. Wyden also wants U.S. regulators to investigate the Amazon-Adept deal. He sent a letter Friday urging antitrust enforcers at the Justice Department and the Federal Trade Commission that "sustained, pointed action is necessary to fight undue consolidation across the industry." "What is going on here is instead of buying startups outright, big tech companies are trying a new play," Wyden said in an interview before sending the letter. "They don't want to formally acquire the companies, avoiding the antitrust scrutiny. I think that's going to be the playbook until the FTC really starts digging into these deals." President Joe Biden's administration and lawmakers from both parties have championed stronger oversight of the tech industry in recent years, likely scaring off big acquisitions that might have sailed through in earlier eras. U.S. antitrust enforcers, for example, plan on investigating the roles Microsoft, Nvidia and OpenAI have played in the artificial intelligence boom, with the Department of Justice looking into chipmaker Nvidia and the Federal Trade Commission scrutinizing business partners Microsoft and OpenAI. Tech giants, including Microsoft, Amazon and Google, are trying to be conservative and not make too many acquisitions in the AI space, Cusumano said. "It seems clever. I would think, though, that they're not fooling anybody," he said. For smaller AI startups, the problem is also that building AI systems is expensive, requiring costly computer chips, power-hungry data centers, huge troves of data to train upon and highly skilled computer scientists. Adept, which aims to make AI software agents that help people with workplace tasks, said it was trying to do two things at once -- build the foundational AI technology as well as the products for end users. But continuing on that path "would've required spending significant attention on fundraising for our foundation models, rather than bringing to life our agent vision," it said in a statement explaining the Amazon deal. "They may have made a decision that they have no real future and just don't have deep enough pockets to compete in this space, so they probably prefer to be acquired outright," Cusumano said. "But if Amazon is not willing or not able to do that, then this is kind of a second-best approach for them." Wyden has long taken an interest in technology, helping to write the 1996 law that helped set the ground rules for free speech on the internet. He said he generally favors a straightforward approach that encourages innovation, with guardrails as needed. But in the AI industry, he said, "companies like Microsoft, Amazon and Google, either own major parts of the AI ecosystem or they have a leg up thanks to their massive resources." John F. Coyle, a law professor at the University of North Carolina, said he believes that Amazon hiring Adept employees without buying the company is clearly a move to avoid antitrust problems. But that type of hiring isn't a "reverse acqui-hire," he said. Acqui-hires are typically face-saving moves that can be spun into success stories, Coyle said, and provide an alternative to liquidating a business. A smaller company can say it was sold to Amazon or Facebook and spin it as a positive, for example, even if wasn't the founders' original plan. "This isn't an acqui-hire. This is a straight up poach," Coyle said of Amazon and Adept. This doesn't just happen in the tech world, he said, calling the move "a version of a very old story." In his class, Coyle said, he teaches students about a case from the 1950s involving an advertising agency in New York City. Some employees left to start a new business and poached roughly 100 others to come to work for them. "There are innumerable instances where one company went and raided another to take all their employees," Coyle said. "That existed before the acqui-hire, that is going to happen after the acqui-hire."

Senator calls out Big Tech's new approach to poaching talent, products from smaller AI startups

In the race to stay ahead in artificial intelligence, the biggest technology companies are swallowing up the talent and products of innovative AI startups without formally acquiring them. San Francisco-based Adept announced a deal late last month that will send its CEO and key employees to Amazon and give the e-commerce giant a license to Adept's AI systems and datasets. Some call it a "reverse acqui-hire." Others call it poaching. Whatever it's called, it's alarming to some in Washington who see it as an attempt to bypass U.S. laws that protect against monopolies. "I'm very concerned about the massive consolidation that's going on in AI," U.S. Sen. Ron Wyden, an Oregon Democrat, told The Associated Press. "The technical lingo is 'up and down the stack'. But, in plain English, a few companies control a major portion of the market, and just concentrate -- rather than on innovation -- trying to buy out everybody else's talent." So-called "acqui-hires," in which one company acquires another to absorb talent, have been common in the tech industry for decades, said Michael A. Cusumano, a business professor at the Massachusetts Institute of Technology. But what's happening in the AI industry is a little different. "To acquire only some employees or the majority, but not all, license technology, leave the company functioning but not really competing, that's a new twist," Cusumano said. A similar maneuver happened at the AI company Inflection in March when Microsoft hired its co-founder and CEO Mustafa Suleyman to head up Microsoft's consumer AI business, along with Inflection's chief scientist and several of its top engineers and researchers. That arrangement has already attracted some scrutiny from regulators, particularly in Europe. Wyden also wants U.S. regulators to investigate the Amazon-Adept deal. He sent a letter Friday urging antitrust enforcers at the Justice Department and the Federal Trade Commission that "sustained, pointed action is necessary to fight undue consolidation across the industry." "What is going on here is instead of buying startups outright, big tech companies are trying a new play," Wyden said in an interview before sending the letter. "They don't want to formally acquire the companies, avoiding the antitrust scrutiny. I think that's going to be the playbook until the FTC really starts digging into these deals." President Joe Biden's administration and lawmakers from both parties have championed stronger oversight of the tech industry in recent years, likely scaring off big acquisitions that might have sailed through in earlier eras. U.S. antitrust enforcers, for example, plan on investigating the roles Microsoft, Nvidia and OpenAI have played in the artificial intelligence boom, with the Department of Justice looking into chipmaker Nvidia and the Federal Trade Commission scrutinizing business partners Microsoft and OpenAI. Tech giants, including Microsoft, Amazon and Google, are trying to be conservative and not make too many acquisitions in the AI space, Cusumano said. "It seems clever. I would think, though, that they're not fooling anybody," he said. For smaller AI startups, the problem is also that building AI systems is expensive, requiring costly computer chips, power-hungry data centers, huge troves of data to train upon and highly skilled computer scientists. Adept, which aims to make AI software agents that help people with workplace tasks, said it was trying to do two things at once -- build the foundational AI technology as well as the products for end users. But continuing on that path "would've required spending significant attention on fundraising for our foundation models, rather than bringing to life our agent vision," it said in a statement explaining the Amazon deal. "They may have made a decision that they have no real future and just don't have deep enough pockets to compete in this space, so they probably prefer to be acquired outright," Cusumano said. "But if Amazon is not willing or not able to do that, then this is kind of a second-best approach for them." Wyden has long taken an interest in technology, helping to write the 1996 law that helped set the ground rules for free speech on the internet. He said he generally favors a straightforward approach that encourages innovation, with guardrails as needed. But in the AI industry, he said, "companies like Microsoft, Amazon and Google, either own major parts of the AI ecosystem or they have a leg up thanks to their massive resources." John F. Coyle, a law professor at the University of North Carolina, said he believes that Amazon hiring Adept employees without buying the company is clearly a move to avoid antitrust problems. But that type of hiring isn't a "reverse acqui-hire," he said. Acqui-hires are typically face-saving moves that can be spun into success stories, Coyle said, and provide an alternative to liquidating a business. A smaller company can say it was sold to Amazon or Facebook and spin it as a positive, for example, even if wasn't the founders' original plan. "This isn't an acqui-hire. This is a straight up poach," Coyle said of Amazon and Adept. This doesn't just happen in the tech world, he said, calling the move "a version of a very old story." In his class, Coyle said, he teaches students about a case from the 1950s involving an advertising agency in New York City. Some employees left to start a new business and poached roughly 100 others to come to work for them. "There are innumerable instances where one company went and raided another to take all their employees," Coyle said. "That existed before the acqui-hire, that is going to happen after the acqui-hire."

Senator calls out Big Tech's new approach to poaching talent, products from smaller AI startups

In the race to stay ahead in artificial intelligence, the biggest technology companies are swallowing up the talent and products of innovative AI startups without formally acquiring them. San Francisco-based Adept announced a deal late last month that will send its CEO and key employees to Amazon and give the e-commerce giant a license to Adept's AI systems and datasets. Some call it a "reverse acqui-hire." Others call it poaching. Whatever it's called, it's alarming to some in Washington who see it as an attempt to bypass U.S. laws that protect against monopolies. "I'm very concerned about the massive consolidation that's going on in AI," U.S. Sen. Ron Wyden, an Oregon Democrat, told The Associated Press. "The technical lingo is 'up and down the stack'. But, in plain English, a few companies control a major portion of the market, and just concentrate -- rather than on innovation -- trying to buy out everybody else's talent." So-called "acqui-hires," in which one company acquires another to absorb talent, have been common in the tech industry for decades, said Michael A. Cusumano, a business professor at the Massachusetts Institute of Technology. But what's happening in the AI industry is a little different. "To acquire only some employees or the majority, but not all, license technology, leave the company functioning but not really competing, that's a new twist," Cusumano said. A similar maneuver happened at the AI company Inflection in March when Microsoft hired its co-founder and CEO Mustafa Suleyman to head up Microsoft's consumer AI business, along with Inflection's chief scientist and several of its top engineers and researchers. That arrangement has already attracted some scrutiny from regulators, particularly in Europe. Wyden also wants U.S. regulators to investigate the Amazon-Adept deal. He sent a letter Friday urging antitrust enforcers at the Justice Department and the Federal Trade Commission that "sustained, pointed action is necessary to fight undue consolidation across the industry." "What is going on here is instead of buying startups outright, big tech companies are trying a new play," Wyden said in an interview before sending the letter. "They don't want to formally acquire the companies, avoiding the antitrust scrutiny. I think that's going to be the playbook until the FTC really starts digging into these deals." President Joe Biden's administration and lawmakers from both parties have championed stronger oversight of the tech industry in recent years, likely scaring off big acquisitions that might have sailed through in earlier eras. U.S. antitrust enforcers, for example, plan on investigating the roles Microsoft, Nvidia and OpenAI have played in the artificial intelligence boom, with the Department of Justice looking into chipmaker Nvidia and the Federal Trade Commission scrutinizing business partners Microsoft and OpenAI. Tech giants, including Microsoft, Amazon and Google, are trying to be conservative and not make too many acquisitions in the AI space, Cusumano said. "It seems clever. I would think, though, that they're not fooling anybody," he said. For smaller AI startups, the problem is also that building AI systems is expensive, requiring costly computer chips, power-hungry data centers, huge troves of data to train upon and highly skilled computer scientists. Adept, which aims to make AI software agents that help people with workplace tasks, said it was trying to do two things at once -- build the foundational AI technology as well as the products for end users. But continuing on that path "would've required spending significant attention on fundraising for our foundation models, rather than bringing to life our agent vision," it said in a statement explaining the Amazon deal. "They may have made a decision that they have no real future and just don't have deep enough pockets to compete in this space, so they probably prefer to be acquired outright," Cusumano said. "But if Amazon is not willing or not able to do that, then this is kind of a second-best approach for them." Wyden has long taken an interest in technology, helping to write the 1996 law that helped set the ground rules for free speech on the internet. He said he generally favors a straightforward approach that encourages innovation, with guardrails as needed. But in the AI industry, he said, "companies like Microsoft, Amazon and Google, either own major parts of the AI ecosystem or they have a leg up thanks to their massive resources." John F. Coyle, a law professor at the University of North Carolina, said he believes that Amazon hiring Adept employees without buying the company is clearly a move to avoid antitrust problems. But that type of hiring isn't a "reverse acqui-hire," he said. Acqui-hires are typically face-saving moves that can be spun into success stories, Coyle said, and provide an alternative to liquidating a business. A smaller company can say it was sold to Amazon or Facebook and spin it as a positive, for example, even if wasn't the founders' original plan. "This isn't an acqui-hire. This is a straight up poach," Coyle said of Amazon and Adept. This doesn't just happen in the tech world, he said, calling the move "a version of a very old story." In his class, Coyle said, he teaches students about a case from the 1950s involving an advertising agency in New York City. Some employees left to start a new business and poached roughly 100 others to come to work for them. "There are innumerable instances where one company went and raided another to take all their employees," Coyle said. "That existed before the acqui-hire, that is going to happen after the acqui-hire."

Senator calls out Big Tech's new approach to poaching talent, products from smaller AI startups

In the race to stay ahead in artificial intelligence, the biggest technology companies are swallowing up the talent and products of innovative AI startups without formally acquiring them. San Francisco-based Adept announced a deal late last month that will send its CEO and key employees to Amazon and give the e-commerce giant a license to Adept's AI systems and datasets. Some call it a "reverse acqui-hire." Others call it poaching. Whatever it's called, it's alarming to some in Washington who see it as an attempt to bypass U.S. laws that protect against monopolies. "I'm very concerned about the massive consolidation that's going on in AI," U.S. Sen. Ron Wyden, an Oregon Democrat, told The Associated Press. "The technical lingo is 'up and down the stack'. But, in plain English, a few companies control a major portion of the market, and just concentrate -- rather than on innovation -- trying to buy out everybody else's talent." So-called "acqui-hires," in which one company acquires another to absorb talent, have been common in the tech industry for decades, said Michael A. Cusumano, a business professor at the Massachusetts Institute of Technology. But what's happening in the AI industry is a little different. "To acquire only some employees or the majority, but not all, license technology, leave the company functioning but not really competing, that's a new twist," Cusumano said. A similar maneuver happened at the AI company Inflection in March when Microsoft hired its co-founder and CEO Mustafa Suleyman to head up Microsoft's consumer AI business, along with Inflection's chief scientist and several of its top engineers and researchers. That arrangement has already attracted some scrutiny from regulators, particularly in Europe. Wyden also wants U.S. regulators to investigate the Amazon-Adept deal. He sent a letter Friday urging antitrust enforcers at the Justice Department and the Federal Trade Commission that "sustained, pointed action is necessary to fight undue consolidation across the industry." "What is going on here is instead of buying startups outright, big tech companies are trying a new play," Wyden said in an interview before sending the letter. "They don't want to formally acquire the companies, avoiding the antitrust scrutiny. I think that's going to be the playbook until the FTC really starts digging into these deals." President Joe Biden's administration and lawmakers from both parties have championed stronger oversight of the tech industry in recent years, likely scaring off big acquisitions that might have sailed through in earlier eras. U.S. antitrust enforcers, for example, plan on investigating the roles Microsoft, Nvidia and OpenAI have played in the artificial intelligence boom, with the Department of Justice looking into chipmaker Nvidia and the Federal Trade Commission scrutinizing business partners Microsoft and OpenAI. Tech giants, including Microsoft, Amazon and Google, are trying to be conservative and not make too many acquisitions in the AI space, Cusumano said. "It seems clever. I would think, though, that they're not fooling anybody," he said. For smaller AI startups, the problem is also that building AI systems is expensive, requiring costly computer chips, power-hungry data centers, huge troves of data to train upon and highly skilled computer scientists. Adept, which aims to make AI software agents that help people with workplace tasks, said it was trying to do two things at once -- build the foundational AI technology as well as the products for end users. But continuing on that path "would've required spending significant attention on fundraising for our foundation models, rather than bringing to life our agent vision," it said in a statement explaining the Amazon deal. "They may have made a decision that they have no real future and just don't have deep enough pockets to compete in this space, so they probably prefer to be acquired outright," Cusumano said. "But if Amazon is not willing or not able to do that, then this is kind of a second-best approach for them." Wyden has long taken an interest in technology, helping to write the 1996 law that helped set the ground rules for free speech on the internet. He said he generally favors a straightforward approach that encourages innovation, with guardrails as needed. But in the AI industry, he said, "companies like Microsoft, Amazon and Google, either own major parts of the AI ecosystem or they have a leg up thanks to their massive resources." John F. Coyle, a law professor at the University of North Carolina, said he believes that Amazon hiring Adept employees without buying the company is clearly a move to avoid antitrust problems. But that type of hiring isn't a "reverse acqui-hire," he said. Acqui-hires are typically face-saving moves that can be spun into success stories, Coyle said, and provide an alternative to liquidating a business. A smaller company can say it was sold to Amazon or Facebook and spin it as a positive, for example, even if wasn't the founders' original plan. "This isn't an acqui-hire. This is a straight up poach," Coyle said of Amazon and Adept. This doesn't just happen in the tech world, he said, calling the move "a version of a very old story." In his class, Coyle said, he teaches students about a case from the 1950s involving an advertising agency in New York City. Some employees left to start a new business and poached roughly 100 others to come to work for them. "There are innumerable instances where one company went and raided another to take all their employees," Coyle said. "That existed before the acqui-hire, that is going to happen after the acqui-hire."

Senator calls out Big Tech's new approach to poaching talent, products from smaller AI startups

In the race to stay ahead in artificial intelligence, the biggest technology companies are swallowing up the talent and products of innovative AI startups without formally acquiring them. San Francisco-based Adept announced a deal late last month that will send its CEO and key employees to Amazon and give the e-commerce giant a license to Adept's AI systems and datasets. Some call it a "reverse acqui-hire." Others call it poaching. Whatever it's called, it's alarming to some in Washington who see it as an attempt to bypass U.S. laws that protect against monopolies. "I'm very concerned about the massive consolidation that's going on in AI," U.S. Sen. Ron Wyden, an Oregon Democrat, told The Associated Press. "The technical lingo is 'up and down the stack'. But, in plain English, a few companies control a major portion of the market, and just concentrate -- rather than on innovation -- trying to buy out everybody else's talent." So-called "acqui-hires," in which one company acquires another to absorb talent, have been common in the tech industry for decades, said Michael A. Cusumano, a business professor at the Massachusetts Institute of Technology. But what's happening in the AI industry is a little different. "To acquire only some employees or the majority, but not all, license technology, leave the company functioning but not really competing, that's a new twist," Cusumano said. A similar maneuver happened at the AI company Inflection in March when Microsoft hired its co-founder and CEO Mustafa Suleyman to head up Microsoft's consumer AI business, along with Inflection's chief scientist and several of its top engineers and researchers. That arrangement has already attracted some scrutiny from regulators, particularly in Europe. Wyden also wants U.S. regulators to investigate the Amazon-Adept deal. He sent a letter Friday urging antitrust enforcers at the Justice Department and the Federal Trade Commission that "sustained, pointed action is necessary to fight undue consolidation across the industry." "What is going on here is instead of buying startups outright, big tech companies are trying a new play," Wyden said in an interview before sending the letter. "They don't want to formally acquire the companies, avoiding the antitrust scrutiny. I think that's going to be the playbook until the FTC really starts digging into these deals." President Joe Biden's administration and lawmakers from both parties have championed stronger oversight of the tech industry in recent years, likely scaring off big acquisitions that might have sailed through in earlier eras. U.S. antitrust enforcers, for example, plan on investigating the roles Microsoft, Nvidia and OpenAI have played in the artificial intelligence boom, with the Department of Justice looking into chipmaker Nvidia and the Federal Trade Commission scrutinizing business partners Microsoft and OpenAI. Tech giants, including Microsoft, Amazon and Google, are trying to be conservative and not make too many acquisitions in the AI space, Cusumano said. "It seems clever. I would think, though, that they're not fooling anybody," he said. For smaller AI startups, the problem is also that building AI systems is expensive, requiring costly computer chips, power-hungry data centers, huge troves of data to train upon and highly skilled computer scientists. Adept, which aims to make AI software agents that help people with workplace tasks, said it was trying to do two things at once -- build the foundational AI technology as well as the products for end users. But continuing on that path "would've required spending significant attention on fundraising for our foundation models, rather than bringing to life our agent vision," it said in a statement explaining the Amazon deal. "They may have made a decision that they have no real future and just don't have deep enough pockets to compete in this space, so they probably prefer to be acquired outright," Cusumano said. "But if Amazon is not willing or not able to do that, then this is kind of a second-best approach for them." Wyden has long taken an interest in technology, helping to write the 1996 law that helped set the ground rules for free speech on the internet. He said he generally favors a straightforward approach that encourages innovation, with guardrails as needed. But in the AI industry, he said, "companies like Microsoft, Amazon and Google, either own major parts of the AI ecosystem or they have a leg up thanks to their massive resources." John F. Coyle, a law professor at the University of North Carolina, said he believes that Amazon hiring Adept employees without buying the company is clearly a move to avoid antitrust problems. But that type of hiring isn't a "reverse acqui-hire," he said. Acqui-hires are typically face-saving moves that can be spun into success stories, Coyle said, and provide an alternative to liquidating a business. A smaller company can say it was sold to Amazon or Facebook and spin it as a positive, for example, even if wasn't the founders' original plan. "This isn't an acqui-hire. This is a straight up poach," Coyle said of Amazon and Adept. This doesn't just happen in the tech world, he said, calling the move "a version of a very old story." In his class, Coyle said, he teaches students about a case from the 1950s involving an advertising agency in New York City. Some employees left to start a new business and poached roughly 100 others to come to work for them. "There are innumerable instances where one company went and raided another to take all their employees," Coyle said. "That existed before the acqui-hire, that is going to happen after the acqui-hire."

Senator calls out Big Tech's new approach to poaching talent, products from smaller AI startups

In the race to stay ahead in artificial intelligence, the biggest technology companies are swallowing up the talent and products of innovative AI startups without formally acquiring them. San Francisco-based Adept announced a deal late last month that will send its CEO and key employees to Amazon and give the e-commerce giant a license to Adept's AI systems and datasets. Some call it a "reverse acqui-hire." Others call it poaching. Whatever it's called, it's alarming to some in Washington who see it as an attempt to bypass U.S. laws that protect against monopolies. "I'm very concerned about the massive consolidation that's going on in AI," U.S. Sen. Ron Wyden, an Oregon Democrat, told The Associated Press. "The technical lingo is 'up and down the stack'. But, in plain English, a few companies control a major portion of the market, and just concentrate -- rather than on innovation -- trying to buy out everybody else's talent." So-called "acqui-hires," in which one company acquires another to absorb talent, have been common in the tech industry for decades, said Michael A. Cusumano, a business professor at the Massachusetts Institute of Technology. But what's happening in the AI industry is a little different. "To acquire only some employees or the majority, but not all, license technology, leave the company functioning but not really competing, that's a new twist," Cusumano said. A similar maneuver happened at the AI company Inflection in March when Microsoft hired its co-founder and CEO Mustafa Suleyman to head up Microsoft's consumer AI business, along with Inflection's chief scientist and several of its top engineers and researchers. That arrangement has already attracted some scrutiny from regulators, particularly in Europe. Wyden also wants U.S. regulators to investigate the Amazon-Adept deal. He sent a letter Friday urging antitrust enforcers at the Justice Department and the Federal Trade Commission that "sustained, pointed action is necessary to fight undue consolidation across the industry." "What is going on here is instead of buying startups outright, big tech companies are trying a new play," Wyden said in an interview before sending the letter. "They don't want to formally acquire the companies, avoiding the antitrust scrutiny. I think that's going to be the playbook until the FTC really starts digging into these deals." President Joe Biden's administration and lawmakers from both parties have championed stronger oversight of the tech industry in recent years, likely scaring off big acquisitions that might have sailed through in earlier eras. U.S. antitrust enforcers, for example, plan on investigating the roles Microsoft, Nvidia and OpenAI have played in the artificial intelligence boom, with the Department of Justice looking into chipmaker Nvidia and the Federal Trade Commission scrutinizing business partners Microsoft and OpenAI. Tech giants, including Microsoft, Amazon and Google, are trying to be conservative and not make too many acquisitions in the AI space, Cusumano said. "It seems clever. I would think, though, that they're not fooling anybody," he said. For smaller AI startups, the problem is also that building AI systems is expensive, requiring costly computer chips, power-hungry data centers, huge troves of data to train upon and highly skilled computer scientists. Adept, which aims to make AI software agents that help people with workplace tasks, said it was trying to do two things at once -- build the foundational AI technology as well as the products for end users. But continuing on that path "would've required spending significant attention on fundraising for our foundation models, rather than bringing to life our agent vision," it said in a statement explaining the Amazon deal. "They may have made a decision that they have no real future and just don't have deep enough pockets to compete in this space, so they probably prefer to be acquired outright," Cusumano said. "But if Amazon is not willing or not able to do that, then this is kind of a second-best approach for them." Wyden has long taken an interest in technology, helping to write the 1996 law that helped set the ground rules for free speech on the internet. He said he generally favors a straightforward approach that encourages innovation, with guardrails as needed. But in the AI industry, he said, "companies like Microsoft, Amazon and Google, either own major parts of the AI ecosystem or they have a leg up thanks to their massive resources." John F. Coyle, a law professor at the University of North Carolina, said he believes that Amazon hiring Adept employees without buying the company is clearly a move to avoid antitrust problems. But that type of hiring isn't a "reverse acqui-hire," he said. Acqui-hires are typically face-saving moves that can be spun into success stories, Coyle said, and provide an alternative to liquidating a business. A smaller company can say it was sold to Amazon or Facebook and spin it as a positive, for example, even if wasn't the founders' original plan. "This isn't an acqui-hire. This is a straight up poach," Coyle said of Amazon and Adept. This doesn't just happen in the tech world, he said, calling the move "a version of a very old story." In his class, Coyle said, he teaches students about a case from the 1950s involving an advertising agency in New York City. Some employees left to start a new business and poached roughly 100 others to come to work for them. "There are innumerable instances where one company went and raided another to take all their employees," Coyle said. "That existed before the acqui-hire, that is going to happen after the acqui-hire."

Senator calls out Big Tech's new approach to poaching talent, products from smaller AI startups - ET Telecom

In the race to stay ahead in artificial intelligence, the biggest technology companies are swallowing up the talent and products of innovative AI startups without formally acquiring them. San Francisco-based Adept announced a deal late last month that will send its CEO and key employees to Amazon and give the e-commerce giant a license to Adept's AI systems and datasets. Some call it a "reverse acqui-hire." Others call it poaching. Whatever it's called, it's alarming to some in Washington who see it as an attempt to bypass U.S. laws that protect against monopolies. "I'm very concerned about the massive consolidation that's going on in AI," U.S. Sen. Ron Wyden, an Oregon Democrat, told The Associated Press. "The technical lingo is 'up and down the stack'. But, in plain English, a few companies control a major portion of the market, and just concentrate - rather than on innovation - trying to buy out everybody else's talent." So-called "acqui-hires," in which one company acquires another to absorb talent, have been common in the tech industry for decades, said Michael A. Cusumano, a business professor at the Massachusetts Institute of Technology. But what's happening in the AI industry is a little different. "To acquire only some employees or the majority, but not all, license technology, leave the company functioning but not really competing, that's a new twist," Cusumano said. A similar maneuver happened at the AI company Inflection in March when Microsoft hired its co-founder and CEO Mustafa Suleyman to head up Microsoft's consumer AI business, along with Inflection's chief scientist and several of its top engineers and researchers. That arrangement has already attracted some scrutiny from regulators, particularly in Europe. Wyden also wants U.S. regulators to investigate the Amazon-Adept deal. He sent a letter Friday urging antitrust enforcers at the Justice Department and the Federal Trade Commission that "sustained, pointed action is necessary to fight undue consolidation across the industry." "What is going on here is instead of buying startups outright, big tech companies are trying a new play," Wyden said in an interview before sending the letter. "They don't want to formally acquire the companies, avoiding the antitrust scrutiny. I think that's going to be the playbook until the FTC really starts digging into these deals." President Joe Biden's administration and lawmakers from both parties have championed stronger oversight of the tech industry in recent years, likely scaring off big acquisitions that might have sailed through in earlier eras. U.S. antitrust enforcers, for example, plan on investigating the roles Microsoft, Nvidia and OpenAI have played in the artificial intelligence boom, with the Department of Justice looking into chipmaker Nvidia and the Federal Trade Commission scrutinizing business partners Microsoft and OpenAI. Tech giants, including Microsoft, Amazon and Google, are trying to be conservative and not make too many acquisitions in the AI space, Cusumano said. "It seems clever. I would think, though, that they're not fooling anybody," he said. For smaller AI startups, the problem is also that building AI systems is expensive, requiring costly computer chips, power-hungry data centers, huge troves of data to train upon and highly skilled computer scientists. Adept, which aims to make AI software agents that help people with workplace tasks, said it was trying to do two things at once - build the foundational AI technology as well as the products for end users. But continuing on that path "would've required spending significant attention on fundraising for our foundation models, rather than bringing to life our agent vision," it said in a statement explaining the Amazon deal. "They may have made a decision that they have no real future and just don't have deep enough pockets to compete in this space, so they probably prefer to be acquired outright," Cusumano said. "But if Amazon is not willing or not able to do that, then this is kind of a second-best approach for them." Wyden has long taken an interest in technology, helping to write the 1996 law that helped set the ground rules for free speech on the internet. He said he generally favors a straightforward approach that encourages innovation, with guardrails as needed. But in the AI industry, he said, "companies like Microsoft, Amazon and Google, either own major parts of the AI ecosystem or they have a leg up thanks to their massive resources." John F. Coyle, a law professor at the University of North Carolina, said he believes that Amazon hiring Adept employees without buying the company is clearly a move to avoid antitrust problems. But that type of hiring isn't a "reverse acqui-hire," he said. Acqui-hires are typically face-saving moves that can be spun into success stories, Coyle said, and provide an alternative to liquidating a business. A smaller company can say it was sold to Amazon or Facebook and spin it as a positive, for example, even if wasn't the founders' original plan. "This isn't an acqui-hire. This is a straight up poach," Coyle said of Amazon and Adept. This doesn't just happen in the tech world, he said, calling the move "a version of a very old story." In his class, Coyle said, he teaches students about a case from the 1950s involving an advertising agency in New York City. Some employees left to start a new business and poached roughly 100 others to come to work for them. "There are innumerable instances where one company went and raided another to take all their employees," Coyle said. "That existed before the acqui-hire, that is going to happen after the acqui-hire."

Senator Calls Out Big Tech's New Approach to Poaching Talent, Products From Smaller AI Startups

In the race to stay ahead in artificial intelligence, the biggest technology companies are swallowing up the talent and products of innovative AI startups without formally acquiring them. San Francisco-based Adept announced a deal late last month that will send its CEO and key employees to Amazon and give the e-commerce giant a license to Adept's AI systems and datasets. Some call it a "reverse acqui-hire." Others call it poaching. Whatever it's called, it's alarming to some in Washington who see it as an attempt to bypass U.S. laws that protect against monopolies. "I'm very concerned about the massive consolidation that's going on in AI," U.S. Sen. Ron Wyden, an Oregon Democrat, told The Associated Press. "The technical lingo is 'up and down the stack'. But, in plain English, a few companies control a major portion of the market, and just concentrate -- rather than on innovation -- trying to buy out everybody else's talent." So-called "acqui-hires," in which one company acquires another to absorb talent, have been common in the tech industry for decades, said Michael A. Cusumano, a business professor at the Massachusetts Institute of Technology. But what's happening in the AI industry is a little different. "To acquire only some employees or the majority, but not all, license technology, leave the company functioning but not really competing, that's a new twist," Cusumano said. A similar maneuver happened at the AI company Inflection in March when Microsoft hired its co-founder and CEO Mustafa Suleyman to head up Microsoft's consumer AI business, along with Inflection's chief scientist and several of its top engineers and researchers. That arrangement has already attracted some scrutiny from regulators, particularly in Europe. Wyden also wants U.S. regulators to investigate the Amazon-Adept deal. He sent a letter Friday urging antitrust enforcers at the Justice Department and the Federal Trade Commission that "sustained, pointed action is necessary to fight undue consolidation across the industry." "What is going on here is instead of buying startups outright, big tech companies are trying a new play," Wyden said in an interview before sending the letter. "They don't want to formally acquire the companies, avoiding the antitrust scrutiny. I think that's going to be the playbook until the FTC really starts digging into these deals." President Joe Biden's administration and lawmakers from both parties have championed stronger oversight of the tech industry in recent years, likely scaring off big acquisitions that might have sailed through in earlier eras. U.S. antitrust enforcers, for example, plan on investigating the roles Microsoft, Nvidia and OpenAI have played in the artificial intelligence boom, with the Department of Justice looking into chipmaker Nvidia and the Federal Trade Commission scrutinizing business partners Microsoft and OpenAI. Tech giants, including Microsoft, Amazon and Google, are trying to be conservative and not make too many acquisitions in the AI space, Cusumano said. "It seems clever. I would think, though, that they're not fooling anybody," he said. For smaller AI startups, the problem is also that building AI systems is expensive, requiring costly computer chips, power-hungry data centers, huge troves of data to train upon and highly skilled computer scientists. Adept, which aims to make AI software agents that help people with workplace tasks, said it was trying to do two things at once -- build the foundational AI technology as well as the products for end users. But continuing on that path "would've required spending significant attention on fundraising for our foundation models, rather than bringing to life our agent vision," it said in a statement explaining the Amazon deal. "They may have made a decision that they have no real future and just don't have deep enough pockets to compete in this space, so they probably prefer to be acquired outright," Cusumano said. "But if Amazon is not willing or not able to do that, then this is kind of a second-best approach for them." Wyden has long taken an interest in technology, helping to write the 1996 law that helped set the ground rules for free speech on the internet. He said he generally favors a straightforward approach that encourages innovation, with guardrails as needed. But in the AI industry, he said, "companies like Microsoft, Amazon and Google, either own major parts of the AI ecosystem or they have a leg up thanks to their massive resources." John F. Coyle, a law professor at the University of North Carolina, said he believes that Amazon hiring Adept employees without buying the company is clearly a move to avoid antitrust problems. But that type of hiring isn't a "reverse acqui-hire," he said. Acqui-hires are typically face-saving moves that can be spun into success stories, Coyle said, and provide an alternative to liquidating a business. A smaller company can say it was sold to Amazon or Facebook and spin it as a positive, for example, even if wasn't the founders' original plan. "This isn't an acqui-hire. This is a straight up poach," Coyle said of Amazon and Adept. This doesn't just happen in the tech world, he said, calling the move "a version of a very old story." In his class, Coyle said, he teaches students about a case from the 1950s involving an advertising agency in New York City. Some employees left to start a new business and poached roughly 100 others to come to work for them. "There are innumerable instances where one company went and raided another to take all their employees," Coyle said. "That existed before the acqui-hire, that is going to happen after the acqui-hire." Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Tech could have a 'massive consolidation' problem due to AI

In the race to stay ahead in artificial intelligence, the biggest technology companies are swallowing up the talent and products of innovative AI startups without formally acquiring them. San Francisco-based Adept announced a deal late last month that will send its CEO and key employees to Amazon and give the e-commerce giant a license to Adept's AI systems and datasets. Some call it a "reverse acqui-hire." Others call it poaching. Whatever it's called, it's alarming to some in Washington who see it as an attempt to bypass U.S. laws that protect against monopolies. "I'm very concerned about the massive consolidation that's going on in AI," U.S. Sen. Ron Wyden, an Oregon Democrat, told The Associated Press. "The technical lingo is 'up and down the stack'. But, in plain English, a few companies control a major portion of the market, and just concentrate -- rather than on innovation -- trying to buy out everybody else's talent." So-called "acqui-hires," in which one company acquires another to absorb talent, have been common in the tech industry for decades, said Michael A. Cusumano, a business professor at the Massachusetts Institute of Technology. But what's happening in the AI industry is a little different. "To acquire only some employees or the majority, but not all, license technology, leave the company functioning but not really competing, that's a new twist," Cusumano said. A similar maneuver happened at the AI company Inflection in March when Microsoft hired its co-founder and CEO Mustafa Suleyman to head up Microsoft's consumer AI business, along with Inflection's chief scientist and several of its top engineers and researchers. That arrangement has already attracted some scrutiny from regulators, particularly in Europe. Wyden also wants U.S. regulators to investigate the Amazon-Adept deal. He sent a letter Friday urging antitrust enforcers at the Justice Department and the Federal Trade Commission that "sustained, pointed action is necessary to fight undue consolidation across the industry." Amazon didn't immediately respond to a request for comment Friday. "What is going on here is instead of buying startups outright, big tech companies are trying a new play," Wyden said in an interview before sending the letter. "They don't want to formally acquire the companies, avoiding the antitrust scrutiny. I think that's going to be the playbook until the FTC really starts digging into these deals." DOJ and FTC officials didn't immediately respond to requests for comment on Wyden's letter. A push for more tech guardrails President Joe Biden's administration and lawmakers from both parties have championed stronger oversight of the tech industry in recent years, likely scaring off big acquisitions that might have sailed through in earlier eras. U.S. antitrust enforcers, for example, plan on investigating the roles Microsoft, Nvidia and OpenAI have played in the artificial intelligence boom, with the Deparment of Justice looking into chipmaker Nvidia and the Federal Trade Commission scrutinizing business partners Microsoft and OpenAI. Tech giants, including Microsoft, Amazon and Google, are trying to be conservative and not make too many acquisitions in the AI space, Cusumano said. "It seems clever. I would think, though, that they're not fooling anybody," he said. For smaller AI startups, the problem is also that building AI systems is expensive, requiring costly computer chips, power-hungry data centers, huge troves of data to train upon and highly skilled computer scientists. Adept, which aims to make AI software agents that help people with workplace tasks, said it was trying to do two things at once -- build the foundational AI technology as well as the products for end users. But continuing on that path "would've required spending significant attention on fundraising for our foundation models, rather than bringing to life our agent vision," it said in a statement explaining the Amazon deal. "They may have made a decision that they have no real future and just don't have deep enough pockets to compete in this space, so they probably prefer to be acquired outright," Cusumano said. "But if Amazon is not willing or not able to do that, then this is kind of a second-best approach for them." Wyden has long taken an interest in technology, helping to write the 1996 law that helped set the ground rules for free speech on the internet. He said he generally favors a straightforward approach that encourages innovation, with guardrails as needed. But in the AI industry, he said, "companies like Microsoft, Amazon and Google, either own major parts of the AI ecosystem or they have a leg up thanks to their massive resources." John F. Coyle, a law professor at the University of North Carolina, said he believes that Amazon hiring Adept employees without buying the company is clearly a move to avoid antitrust problems. But that type of hiring isn't a "reverse acqui-hire," he said. Acqui-hires are typically face-saving moves that can be spun into success stories, Coyle said, and provide an alternative to liquidating a business. A smaller company can say it was sold to Amazon or Facebook parent Meta Platforms and spin it as a positive, for example, even if wasn't the founders' original plan. "This isn't an acqui-hire. This is a straight up poach," Coyle said of Amazon and Adept. This doesn't just happen in the tech world, he said, calling the move "a version of a very old story." In his class, Coyle said, he teaches students about a case from the 1950s involving an advertising agency in New York City. Some employees left to start a new business and poached roughly 100 others to come to work for them. "There are innumerable instances where one company went and raided another to take all their employees," Coyle said. "That existed before the acqui-hire, that is going to happen after the acqui-hire."

U.S. Senator denounces new tactics used by big tech companies to steal talent and products from AI startups - ExBulletin

In the race to stay ahead in artificial intelligence, big tech companies are gobbling up the talent and products of innovative AI startups without formally acquiring them. Now three U.S. senators are calling for an investigation. San Francisco-based Adept sent its CEO and key employees to Amazon late last month to announce a deal to license Adept's AI systems and datasets to the e-commerce giant. Some call it reverse buyout hiring. Others call it poaching. Whatever you call it, some in Washington are wary of it as an attempt to circumvent antitrust laws. "I'm very concerned about the massive consolidation that's happening in AI," Sen. Ron Wyden, D-Ore., told The Associated Press. "The tech terms are up and down the stack, but in plain English, a few companies control most of the market and they're focused not on innovating but on trying to buy up everyone else's talent." Michael A. Kusmano, a business professor at the Massachusetts Institute of Technology, said that "hiring by acquisition," where one company buys another and absorbs its talent, has been common in the tech industry for decades, but what's happening in AI is a little different. Buying out only some or most of the employees (but not all) and licensing technology while keeping the company functional but not actually a competitor is a new development, Kusmano said. A similar move occurred with AI company Inflexion in March, when Microsoft hired Inflexion co-founder and CEO Mustafa Suleyman to head the company's consumer AI business, along with Inflexion's chief scientist and several top engineers and researchers. The deal has already drawn some scrutiny from regulators, especially in Europe. Wyden also wants U.S. regulators to investigate the Amazon-Adept deal. Wyden, along with Sens. Elizabeth Warren of Massachusetts and Peter Welch of Vermont, wrote antitrust enforcement officials at the Justice Department and the Federal Trade Commission on Friday urging sustained, targeted action to combat unfair consolidation across the industry. Amazon did not immediately respond to a request for comment Friday. "What's happening here is that instead of buying startups, big tech companies are trying a new strategy," Wyden said in an interview before sending the letter. "They don't want to formally acquire companies to avoid antitrust scrutiny. I think this will be the strategy until the FTC starts to seriously investigate these transactions." Officials from the Justice Department and FTC did not immediately respond to requests for comment on the senators' letter. President Joe Biden's administration and lawmakers from both parties have in recent years pushed for increased scrutiny of the tech industry, appearing to block major acquisitions that might have previously gone through easily. For example, U.S. antitrust enforcement agencies plan to investigate Microsoft, Nvidia and OpenAI for their roles in the artificial intelligence boom, while the Department of Justice is investigating chipmaker Nvidia and the Federal Trade Commission is scrutinizing business partners Microsoft and OpenAI. Tech giants such as Microsoft, Amazon and Google are becoming more conservative and making fewer acquisitions in the AI space, Kusmano said. "It's a clever way to do it, but I don't think it's fooling anyone," he said. The problem for small AI startups is that building AI systems is expensive, requiring expensive computer chips, power-hungry data centers, vast amounts of data for training, and highly skilled computer scientists. Adept, which aims to develop AI software agents to help with workplace tasks, said it was trying to do two things at once: develop foundational AI technology and build end-user products. But continuing on that path required paying significant attention to funding the underlying model, rather than delivering on its vision for the agents, it said in a statement explaining the Amazon deal. "Maybe they decided they didn't have a real future and weren't financially strong enough to compete in this space, so maybe they want to be acquired outright," Kusmano said. "But if Amazon isn't willing or able to do that, this is the next best thing for them." Wyden, a longtime technology enthusiast who helped write the 1996 law that laid out the ground rules for free speech on the Internet, said he generally supports a straightforward approach that encourages innovation while putting in guardrails where necessary. But in the AI industry, companies like Microsoft, Amazon and Google either own major parts of the AI ecosystem or are dominant thanks to their vast resources, he said. John F. Coyle, a law professor at the University of North Carolina, said he thinks Amazon's hiring of Adept employees without buying the company is clearly a move to avoid antitrust issues, but he said this type of hiring is not a reverse acquisition hire. Coyle said hiring through acquisitions is typically a face-saving move that can be touted as a success story and an alternative to liquidation: Smaller companies can say they got sold to Amazon or Facebook parent Meta Platforms and tout that as a positive thing, even if it wasn't the founders' original plan. "This isn't a talent acquisition. This is talent poaching," Coyle said of Amazon and Adept. This isn't unique to the tech industry, Coyle said, and this move is one of those very old stories: He said he teaches his students the case of a New York City ad agency in the 1950s, where some employees left to start a new business, then poached about 100 other employees and hired them into their own company. "There are countless examples of one company raiding another and taking all of the employees," Coyle said. "This happened before buy-and-hire and it will happen after buy-and-hire." What Are The Main Benefits Of Comparing Car Insurance Quotes Online