US Senators Criticize Big Tech for Poaching Talent, Products from Smaller AI Startups

US senators call for investigation into tech giants poaching AI startups

The race to stay ahead in AI has taken a controversial turn as big tech companies poach the talent and products of innovative AI startups without formally buying them out. This practice, known as a “reverse takeover,” has caught the attention of three members of the U.S. Senate, who are now calling for an investigation.

One recent example is a deal announced by San Francisco-based Adept in which its CEO and key employees will move to Amazon and the e-commerce giant will license Adept’s AI systems and datasets, a move that has raised concerns in Washington about potential antitrust violations.

According to U.S. Senator Ron Wyden, consolidation in the AI ​​industry is worrying because a few companies control a large part of the market and focus more on talent acquisition than innovation. This trend of acquiring talent without fully taking over a company is a new twist in the technology industry, according to MIT business professor Michael A. Cusumano.

Other tech giants have made similar moves, including Microsoft hiring the CEO of AI firm Inflection, which has also drawn regulatory scrutiny. Wyden, along with Senators Elizabeth Warren and Peter Welch, sent a letter urging antitrust regulators to take action against the practice.

The Justice Department and the Federal Trade Commission have acknowledged the senators’ concerns but have not commented further. As oversight of the tech industry has increased, major acquisitions are coming under scrutiny, prompting companies like Microsoft, Amazon and Google to be more cautious about AI-related acquisitions.

For smaller AI startups, the cost of developing AI systems is a significant challenge, prompting some to seek partnerships or acquisitions. Adept, for example, explained that the Amazon deal allowed them to focus on their vision of AI agents without having to raise additional funds.

Despite efforts to avoid antitrust issues, some experts say hiring talent without taking over an entire company is a way for tech giants to skirt regulations. But the practice, which some call “poaching,” is not a new phenomenon in the business world.

Overall, examining these practices highlights the complex dynamics of the AI ​​industry and the challenges both startups and established tech companies face as they try to navigate the regulatory and competitive landscape.