DOJ Scrutinizes Google's AI Talent Deals: The Rise of 'Take Unders'

DOJ Probe into AI Talent Acquisition

• ⚖️ The Department of Justice (DOJ) is reportedly scrutinizing a multi-billion dollar deal Google made to rehire a top AI mind from his startup, Character.AI.
• 🎯 This probe highlights a broader issue for big tech companies attempting to lure AI talent.

The Nature of AI Deals

• 🤝 These deals are described as 'take unders' rather than typical M&A, designed to acquire key talent while leaving the startup technically independent.
• ✂️ This strategy effectively cuts startups off at the knees, with founders departing and their direction absorbed into larger tech firms.
• 🏛️ This practice is precisely what Washington has been trying to crack down on.

Talent as the AI Battleground

• 🧠 In the current AI race, talent is the primary battleground, with some of the most expensive deals focused on people, not products.
• 💰 Examples include OpenAI acquiring designer Jony Ive for $6.5 billion, Microsoft hiring Mustafa Suleyman for AI leadership, and Google's $2.7 billion deal for Noam Shazeer from Character.AI.
• 🚀 Other significant talent acquisitions mentioned include Ilya Sutskever and Oriol Vinyals (raising $3 billion) and Amazon's take under of Adept.

'Aqua Hires' vs. 'Take Unders'

• 🧐 The term 'aqua hire' typically implies an actual acquisition, but these deals often involve only taking the talent, leaving the company behind.
• 🚫 This distinction is crucial as it suggests these 'take unders' may have been structured to skirt regulatory oversight.
• 🍎 Apple is noted as a mega-cap company that has largely sat out these AI talent wars, a gap that is becoming increasingly apparent.