FILE – Daniel De Freitas, left, and Noam Shazeer, co-founders of Character.ai, at their offices in Palo Alto, Calif., on Jan. 6, 2022. After leaving Google to build their AI startup, the pair recently announced they had struck a deal to rejoin Google’s A.I. research arm, along with roughly 20 percent of Character.AI’s employees. SAN FRANCISCO — In 2022, Noam Shazeer and Daniel De Freitas left their jobs developing artificial intelligence at Google. They said the tech giant moved too slowly.
“Large tech firms may clearly be trying to avoid regulatory scrutiny by not directly acquiring the targeted firms,” said Justin Johnson, a business economist who focuses on antitrust at Cornell University. But “these deals do indeed start to look a lot like regular acquisitions.” That excitement cooled as it became clear that some high-profile AI startups would not succeed, creating an opportunity for big tech companies to swoop in with nontraditional deals.Map: These are the properties on Denver’s neglected buildings list
Regulators are watching. The FTC is working on a broad study of AI deals between startups and Microsoft, Amazon and Google, the agency said in January. It is also investigating whether Microsoft should have notified regulators about the Inflection deal, which would have subjected the arrangement to more immediate scrutiny, a person with knowledge of the matter said.
Yet the transactions have also left behind orphaned corporate entities, stranding remaining employees at startups where the founders and investors have moved on. Those employees do not get to partake in the financial spoils of these deals.“If you build a company and you take on money from investors, every person involved deserves to be rewarded,” said Sebastian Thrun, an AI researcher and serial entrepreneur known for founding Google’s self-driving car project.