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Big tech companies are plowing money into AI startups, which could help them dodge antitrust concerns | TechCrunch

May 24, 2024 - techcrunch.com
The article discusses the recent trend of large tech companies investing heavily in AI startups, with examples such as DeepL, Scale AI, and H raising significant funding at high valuations. The investments are seen as a way for these tech giants to gain control and influence over emerging technologies without outright acquisition, a tactic referred to as a "quasi-merger". This approach, however, has attracted the attention of antitrust regulators, particularly in the European Union and the U.K.

The article also highlights specific cases such as Microsoft's close relationship with OpenAI and Amazon's significant investment in Anthropic. Both cases are under scrutiny by regulators to determine if they qualify for antitrust investigations. Despite the regulatory attention, the article suggests that big tech companies are unlikely to ease their AI startup investment strategies, as they hope that smaller equity stakes might help them avoid regulatory issues.

Key takeaways:

  • AI startups are attracting significant investments, with DeepL raising $300 million, Scale AI securing a valuation of $13.8 billion, and French startup H raising $220 million.
  • Big Tech companies, including Meta, Amazon, Nvidia, Intel, AMD, Cisco, and ServiceNow, are investing in these startups, a trend that has raised concerns about a new “quasi-merger” tactic that seeks control and influence over new technologies.
  • Microsoft's close relationship with OpenAI and Amazon's significant investment in Anthropic have attracted scrutiny from antitrust regulators in the European Union and the U.K.
  • Nvidia, now valued at over $2.5 trillion, has emerged as a major player in the AI sector, investing in several AI startups including Hugging Face, Cohere, Perplexity AI, Inflection AI, Cohesity, Mistral AI, Weka, and Wayve.
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