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

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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 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 acquihire.” 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. “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,” Michael A. Cusumano, a business professor at the Massachusetts Institute of Technology, said. “What is going on here is instead of buying startups outright, big tech companies are trying a new play,” U.S. Sen. Ron Wyden said in an interview. “They don’t want to formally acquire the companies, avoiding the antitrust scrutiny. I think that’s going to be the playbook until the Federal Trade Commission (FTC) really starts digging into these deals.” 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. “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. 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.” This article was provided by The Associated Press.