Source: Wall Street See

Last year, AI startups had a strong showing in the capital markets, attracting billions of dollars in investment. However, with growing market skepticism towards AI technology and the high cost and long-term return characteristics of generative AI technology, many startups have found it difficult to continue, with many forced to choose to "sell themselves" for survival. Product structure, 10-30 billion yuan products operating income of 401/1288/60 million yuan respectively.

Under strict anti-monopoly regulation, Silicon Valley tech giants have come up with a unique way to extend a "helping hand" through "talent acquisition" and technology licensing.

For example, Google.Google-A (GOOGL.US) also had two splits, the most recent being in 2022. Nvidia is about to undergo its sixth split since 2000./Example of such tech giants is Google-C (GOOG.US)Recently, they reached an agreement with Character.AI to obtain the company's technology and talent resources with a licensing fee of 2 billion US dollars. Noam Shazeer and Daniel De Freitas, co-founders of Character.AI, will return to Google, where they were both former employees.

This new form of acquisition allows tech giants to obtain the core technology and talent of startups by paying high licensing fees for technology, while avoiding the scrutiny that direct acquisitions may bring from regulatory agencies.

Sources say that Google and Character.AI had considered a direct acquisition, but ultimately decided to avoid regulatory scrutiny by acquiring the company's talent and technology through people and technology acquisition.

Three AI unicorns have already been acquired by major companies.

Similarly, Amazon.$Amazon (AMZN.US)$and Microsoft$Microsoft (MSFT.US)$have also reached similar cooperation agreements with AI unicorns Adept AI and Inflection, respectively.

Microsoft pioneered the "talent acquisition" model. In March of this year, Microsoft hired almost all of Inflection's employees, set up a new consumer AI department, and paid around $650 million to purchase its technology license.

According to media reports, in June of this year, Amazon reached an agreement with Adept AI, employing most of its employees and paying about $330 million for its technology license.

This amount of money, plus Adept's remaining cash, is enough to repay investors, but for this unicorn, which was valued at $1 billion last year, the outcome is truly regrettable.

The main problem facing AI startups today is that the research and maintenance of generative AI require hundreds of millions of dollars in initial investment, which often cannot be recouped in a short period of time. Many startups have found themselves without enough resources and channels to achieve this goal.

AI venture capital company AIX Ventures co-founder Shaun Johnson said, "There are many companies that raise money based on a grand vision without specific examples and practical details."

However, with growing market skepticism towards the monetization of AI, coupled with fears of an economic recession, US technology stocks have plummeted, with the Nasdaq composite index falling 13% in the past month.

However, in recent times, with doubts growing about the monetization ability of AI and coupled with the intensification of economic recession panic, American technology stocks plummeted and the Nasdaq fell by 13% in the past month.$Nasdaq Composite Index (.IXIC.US)$The past month has seen a 13% decline.

“Talent acquisition,” which involves buying all the key employees of a company, is a common practice for tech giants to circumvent traditional acquisition processes and regulatory scrutiny. However, hiring key employees of a startup and exchanging them for the right to use technology through licensing fees is unusual.

With more and more AI startups being swallowed up by big companies through the "talent acquisition" and technology licensing model, regulatory agencies are once again on high alert.

According to industry insiders, the US government is stepping up its efforts to prevent such disguised acquisition deals.

The Federal Trade Commission (FTC) is investigating the deals between Amazon and Adept AI, and Microsoft and Inflection, to determine if these deals intentionally circumvent regulatory scrutiny.

According to reports citing industry insiders, the US government is stepping up action to prevent such disguised acquisition deals.

John Newman, a law professor specializing in antitrust and competition law at the University of Miami, said, "Tech giants know that the days when they can acquire hundreds of small companies without (regulatory) challenges are over."

Editor / jayden