The news: Under pressure to deliver on AI investments, Big Tech companies like Meta and Apple are seeking to acquire AI startups. Failing that, they’re looking to hire away founders and key personnel to boost their own capabilities.

Acquiring as a means of leapfrogging competition is nothing new to Apple or to Meta. The former hired automotive executives from Lamborghini, BMW, and Tesla for its now-defunct EV project. Similarly, Meta absorbed Oculus to seize the lead in VR headsets and mixed-reality applications.

Meta is on an AI acquisition frenzy: Sparing no time and no expense, Meta is pursuing AI talent to bolster its ranks. Perplexity, Scale AI, Safe Superintelligence are key targets, and if it can’t buy entire AI companies, it’s hoping to entice individual talent.

• Meta approached AI search stalwart Perplexity for a potential takeover, per CNBC, and when that deal fell through, Meta turned its attention to former OpenAI founder Ilya Sutskever’s Safe Superintelligence (SSI), offering $32 billion to absorb the startup.
• After Sutskever rejected the offer, Meta poached SSI co-founder Daniel Gross, and then pivoted to investing $14 billion in Scale AI—effectively owning 49% of that startup—indicating a move away from in-house research.

OpenAI CEO Sam Altman said last week that Meta has offered employees from OpenAI and Google DeepMind $100 million signing bonuses to join Meta, per TechCrunch.

Apple sees Perplexity as a solution to two problems: Now, Apple’s executives are reportedly seeking to acquire Perplexity, per Bloomberg, although Apple hasn’t approached Perplexity and a formal offer may not materialize.

How the deal could benefit Apple: 

• Perplexity has a fully formed AI search service which, if acquired by Apple, could help the iPhone maker reduce its reliance on Google for default search on its devices. 
• Integrating Perplexity as Siri’s AI search service could help fill Apple Intelligence’s void of features and quell credibility concerns. 
• A deal could also create a new search business with attached advertising opportunities.

The caveat: Buying companies or hiring their talent doesn’t guarantee success. Apple recruited Google’s head of search and AI, John Giannandrea, to lead its AI transition but recently moved him to other projects after persistent AI delays.

In the case of AI startups, there’s a limited number of companies with solid go-to-market products. Most of them are more likely to opt to compete in one of the hottest business segments rather than choose acquisition.

Our take: The recent complications between OpenAI and Microsoft reveal that partnerships and investments aren’t always compatible with a startup’s growth.

Expect Meta and Apple to pit money over mission as they hire away founders and key engineers, leaving AI startups high and dry, similar to how Google hired ex-Googlers from AI chatbot startup Character AI. The AI startup talent pool could be shrinking as startups and founders get acqui-hired by Big Tech.

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