Big Tech is eating itself in talent war

Big Tech's insatiable thirst for AI talent is threatening to kill its golden goose.

- Asa Fitch

Tech companies are paying AI researchers billions of dollars and using unorthodox tactics to grab the brightest minds. Their moves might help them near-term in the battle for AI supremacy, but they could also stifle a Silicon Valley innovation engine they badly need.

Alongside job offers worth as much as $1 billion, Microsoft, Meta Platforms, Amazon.com and Google-parent Alphabet have all indulged in some version of what has come to be called the "reverse acquire": Instead of acquiring startups, they have hired away founders and top AI researchers—or licensed startups' technology—and left the husk of the businesses to either find new missions or be acquired by someone else.

Microsoft did it with Inflection AI last year, bringing in its chief executive Mustafa Suleyman to manage its Copilot AI business, and paid a $650 million licensing fee to the company.

Meta did it in June with AI data-labeling specialist Scale AI, proffering a $14.8 billion investment in the company in exchange for CEO Alexandr Wang and a team of Scale employees.

Such moves suit the needs of the top tech companies in the current moment. The hires are pulled off quickly during an AI race that the companies see as a once-in-a-generation opportunity.