Senator Elizabeth Warren, 2 others send letter to FTC and DOJ: Inspect AI deals from Nvidia, Meta and Google for…

Three US senators are calling on the country’s regulators to investigate the “acquihires” by artificial intelligence (AI) giants, alleging that these tech companies may be bypassing antitrust laws to diminish competition. In a letter sent on Wednesday (February 4) to the Federal Trade Commission (FTC) and the Department of Justice (DOJ), Senators Elizabeth Warren, Ron Wyden and Richard Blumenthal urged the agencies to scrutinise deals from Nvidia, Meta and Google. According to a report by news agency Reuters, the senators claim these companies are using “reverse acqui-hiring” – a tactic where a large firm pays to hire a startup’s top talent and intellectual property without undergoing a formal acquisition. These deals “function as de facto mergers, allowing the companies to consolidate talent, information, and resources, all while apparently attempting to bypass the scrutiny typically applied to mergers and acquisitions,” the letter reads.The senators wrote that the agencies should “carefully scrutinize these deals and block or reverse them should they violate antitrust law”, which may make it more difficult for tech companies to continue pursuing these types of deals.The Senators’ letter identified three specific transactions as examples:Nvidia and Groq ($20 Billion): In December, Nvidia struck a deal where the chip giant purchased assets from AI chipmaker Groq specifically to bring in its senior leadership.Meta and Scale AI ($14.3 Billion): In June, Meta made an investment to bring Scale AI CEO Alexandr Wang in-house to lead Meta’s global AI strategy.Google and Windsurf ($2.4 Billion): A July “nonexclusive licensing agreement” effectively moved the coding startup’s key leaders to Google’s payroll.“These arrangements further consolidate the Big Tech industry, which in turn could cause higher prices and stifle innovation,” the senators wrote in the letter addressed to Assistant Attorney General Gail Slater and FTC Chairman Andrew Ferguson. “The FTC and DOJ should not allow these companies to avoid the typical reviews that your agencies apply to acquisitions and mergers,” they added. The letter follows a statement from Ferguson in January in which he said the FTC would review these kinds of deals.