US SENATORS CALL OUT BIG TECH'S NEW APPROACH TO POACHING TALENT, PRODUCTS FROM SMALLER AI STARTUPS

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.

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Now three members of the U.S. Senate are calling for an investigation.

San Francisco-based Adept announced a deal late last month 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 acqui-hire.” 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.

“I’m very concerned about the massive consolidation that’s going on in AI,” U.S. Sen. Ron Wyden, an Oregon Democrat, told. “The technical lingo is ‘up and down the stack’. But, in plain English, a few companies control a major portion of the market, and just concentrate — rather than on innovation — trying to buy out everybody else’s talent.”

So-called “acqui-hires,” in which one company acquires another to absorb talent, have been common in the tech industry for decades, said Michael A. Cusumano, a business professor at the Massachusetts Institute of Technology. But what’s happening in the AI industry is a little different.

“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,” Cusumano said.

A similar maneuver happened at the AI company Inflection in March when Microsoft hired its co-founder and CEO Mustafa Suleyman to head up Microsoft’s consumer AI business, along with Inflection’s chief scientist and several of its top engineers and researchers. That arrangement has already attracted some scrutiny from regulators, particularly in Europe.