Tech could have a 'massive consolidation' problem due to AI
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Lawmakers, including U.S. Senator Ron Wyden, are concerned about the 'massive consolidation' happening in the tech industry due to the acquisition of talent and products from innovative AI startups without formal acquisitions. This practice, known as 'reverse acqui-hire' or poaching, allows big tech companies to bypass U.S. laws protecting against monopolies. Wyden has urged U.S. regulators to investigate these practices, specifically mentioning the recent Amazon-Adept deal. The push for stronger oversight of the tech industry by the Biden administration and lawmakers has likely deterred big acquisitions. Tech giants like Microsoft, Amazon, and Google are being conservative in making acquisitions in the AI space. Smaller AI startups face challenges in building AI systems due to the high costs involved. The hiring of Adept employees by Amazon without acquiring the company is seen as an attempt to avoid antitrust problems. However, legal experts argue that this is not a 'reverse acqui-hire' but rather a straightforward poaching. The concern over consolidation in the AI industry arises from the fact that a few companies control a major portion of the market, hindering innovation and competition.

#Ai #TechIndustry #Consolidation #Acquihire #Antitrust #Innovation

https://fortune.com/2024/07/12/ai-massive-consolidation-big-tech-ron-wyden/