Earlier this week, the UK’s Competition and Markets Authority (CMA) announced an inquiry into a similar move by Microsoft, which recruited most of the employees from startup, Inflection, for its consumer AI group. In June, the FTC too had launched an investigation to determine whether there actually was an undisclosed acquisition through the hiring of key personnel and the licensing agreement with Inflection.
AI growth amid scrutiny
Expanding AI capabilities has become inevitable for tech companies. Faisal Kawoosa, chief analyst at Techarc, pointed out that Amazon has been lagging in its AI journey compared to other big tech companies, necessitating a search for inorganic growth strategies.
“We’ve seen a similar approach with Apple, which acquired a startup like DarwinAI due to uncertainties in their ecosystem,” said Kawoosa. “As for this investigation, it appears to be preliminary to determine if it warrants a deeper look. Regulators are assessing whether anything in this transaction violates trade practices.”