How Amazon’s Hiring of Startup Adept AI Avoids Antitrust Scrutiny

A few months ago, I was sitting in the audience at a technology conference in San Francisco watching BloombergEmily Chang interviews Reid Hoffman.

She asked about Microsoft’s hiring of the team behind Inflection, a potential OpenAI competitor that Hoffman co-founded. It was an acquisition in all but name, clearly designed to avoid scrutiny from antitrust regulators. Microsoft (of which Hoffman is a board member) not only hired most of Inflection’s employees, but also licensed the startup’s technology in a way that seemed designed to make your investors whole.

Speaking to Chang that day on stage, Hoffman predicted that what happened with Inflection will become a “standard” for future AI deals. We are seeing this pattern play out now.

Last Friday, Amazon announced that it is hiring most of the team behind Adept, another potential OpenAI competitor that has raised about $400 million from blue-chip investors to build, in the words of CEO David Luan“a new kind of giant model that turns natural language into actions on your machine.”

Amazon said GeekWirein Taylor Soper which is hiring 80% of Adept’s employees, including Luan and his co-founders. In an internal memo published by the outlet, senior vice president Rohit Prasad said that, like Microsoft with Inflection, Amazon will also license Adept’s technology to “accelerate our roadmap for building digital agents that can automate workflows.” software work.”

Adept corporate blog post on the news suggests it was running out of money: “Continuing with Adept’s initial plan to build useful general intelligence and an enterprise agent product would require devoting significant attention to fundraising for our base models rather than bringing our vision to life of agent.” Recent reports say that the company have been looking sell yourself.

The reality is that building leading AI models is extremely expensive and raising $400 million is not enough to compete today. Meanwhile, Big Tech is flush with cash and looking to participate in what everyone considers to be the next big thing. It stands to reason that more AI startups will follow the path of Inflection and Adept as the industry consolidates.

The problem for Big Tech is that they are no longer allowed to buy companies like they used to. The current antitrust regime would certainly try to block Amazon’s acquisition of Adept, whether or not there is a strong legal case for doing so. (Amazon executives are still furious that they weren’t allowed to buy a robotic vacuum cleaner company.)

Even so, capitalism finds a way. What Microsoft did with Inflection, and what Amazon just did with Adept, is Big Tech’s new playbook for gobbling up the AI ​​industry and getting away with it. Silicon Valley has a storied history of acquisitions, where a startup is destroyed by its people and left for dead. Microsoft and Amazon have done what are essentially reverse acquisitions, in which the hiring of people and a corresponding licensing agreement are designed to disguise what is actually an acquisition.

Meanwhile, Reid Hoffman should probably be congratulated for more than just an accurate prediction about the future of these businesses – one of Adept’s earliest investors was none other than his venture capital firm, Greylock.