TL;DR:
- Big Tech companies like Microsoft, Amazon, and Meta are investing heavily in AI startups, raising antitrust concerns.
- Corporations are adopting a “quasi-merger” tactic to gain control and influence over nascent AI technologies.
- Nvidia has emerged as a major player in the AI gold rush, investing in and buying stakes in various AI startups.
The AI Gold Rush
Big Tech companies are pouring money into AI startups, with eye-watering cash injections and valuations emerging weekly. DeepL, an AI language translation startup, raised $300 million on a $2 billion valuation. Scale AI, a data-labelling platform for machine learning models, secured $1 billion, nearly doubling its valuation to $13.8 billion. H, a French startup working on frontier models, raised a staggering $220 million seed round, propelling it into unicorn territory.
Corporate Clamber and Regulatory Dodge
While institutional investors like Accel, Index, and Y Combinator are present, these investments highlight the corporate scramble to get involved while keeping regulators at bay. Companies like Meta, Amazon, and Nvidia are investing in AI startups, marking a departure from traditional institutional and angel investors.
The Quasi-Merger Tactic
Corporate investment in AI startups has been a significant story in recent years, with Microsoft’s close affiliation with ChatGPT maker OpenAI being a prime example. This relationship has attracted scrutiny from antitrust regulators in the European Union and the UK. Big Tech is adopting a new “quasi-merger” tactic, seeking control and influence over emerging technologies without buying them outright. This strategy includes hiring founding startup teams or making strategic investments.
Nvidia’s Rise in the AI Race
Nvidia, though not traditionally considered “Big Tech,” has become a major player in the AI gold rush. Valued at $770 billion last year, its worth has skyrocketed to over $2.5 trillion, making it the third most valuable company globally. Nvidia has invested in AI startups like Hugging Face, Cohere, Perplexity AI, Inflection AI, Cohesity, Mistral AI, Weka, and Wayve, among others.
Regulatory Pass and Subtle Control
Big Tech shows no signs of slowing down its AI startup investment strategy, hoping that smaller equity stakes will grant them a regulatory pass. However, being stakeholders allows these corporations to influence startups in various subtle and not-so-subtle ways.
The Rise of AI Startups
The rise of AI startups presents both opportunities and challenges. As Big Tech companies invest in these startups, they gain access to cutting-edge technology and potential market dominance. However, this also raises antitrust concerns, as these investments could lead to monopolies and stifle competition.
What are your thoughts on Big Tech’s investment in AI startups? Do you think this trend will continue, or will antitrust regulations curb it? Share your thoughts in the comments below and don’t forget to subscribe for updates on AI and AGI developments.
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