FTC to Investigate Big Tech's Hiring Deals, Bloomberg Reports

• Microsoft paid $650 million structured as a licensing fee to acquire a startup's top AI executive, while Meta spent $15 billion to hire Scale AI's CEO without buying the firm
• FTC Chairman Ferguson attributed the rise of acqui-hire practices to the Biden administration's aggressive antitrust enforcement, which prompted companies to find alternative deal structures
• Recent acqui-hires include Nvidia licensing Groq's chip technology and hiring its CEO (a Google veteran), and Amazon hiring founders from Adept AI, though no deals have been unwound by regulators yet

FTC to Investigate Big Tech's Hiring Deals, Bloomberg Reports

Key Development:

The U.S. Federal Trade Commission is launching investigations into "acqui-hires" by major technology companies, where firms hire startup employees and license technology without formally acquiring the companies—a practice that potentially circumvents antitrust merger reviews.

Regulatory Statement:

FTC Chairman Andrew Ferguson told Bloomberg Television that the agency is examining these arrangements "to make sure they are not an attempt to get around" the merger review process. Ferguson attributed the rise of this practice to the Biden administration's aggressive antitrust enforcement stance.

Recent Examples:

• Nvidia: Licensed chip technology from startup Groq and hired CEO Jonathan Ross, an ex-Google veteran
• Microsoft: Acquired top AI executive through a $650 million licensing deal with a startup
• Meta: Spent $15 billion to hire Scale AI's CEO without acquiring the company
• Amazon: Hired founders from Adept AI

Market Context:

These deals represent a growing trend where Big Tech companies access innovation and talent while avoiding lengthy regulatory scrutiny typically associated with traditional acquisitions. Despite regulatory attention, none of these arrangements has been unwound to date.

Political Backdrop:

President Donald Trump fired the FTC's two Democratic commissioners last year, triggering a Supreme Court case that could expand presidential control over independent agencies. This adds uncertainty to the regulatory landscape surrounding Big Tech oversight.

Market Implications:

The investigation signals heightened regulatory scrutiny of alternative deal structures in the tech sector, potentially complicating talent acquisition strategies and increasing compliance risks for major technology firms pursuing startup partnerships.