Investors in Adept, an AI startup whose top employees were hired away by Amazon in June, will get their money back even though ownership of the company hasn’t changed, according to people briefed on the matter. Adept, which still retains about a third of its employees, will receive around $25 million, while investors like Greylock and General Catalyst, who put $414 million into the company, will roughly recoup their investment. Founded by top researchers from OpenAI and Google, the startup was most recently valued at $1 billion. The terms of Amazon’s mass hiring will be of interest to regulators weighing whether the poaching amounted to an acquisition of Adept, but circumvented merger notification rules since the startup’s owners remain the same. The US Federal Trade Commission has sent a list of questions to Amazon inquiring about the details of its Adept relationship, Reuters first reported and Semafor has confirmed.  Andrew Kelly/ReutersThe FTC is already probing a similar deal — Microsoft’s March hiring of most of the employees at Inflection AI, including its co-founder, Mustafa Suleyman. Microsoft agreed to pay Inflection $650 million in licensing fees for its technology. Adept was working on building advanced, general intelligence AI models and agents capable of carrying out autonomous tasks. But its ambitious plans were burdened by the skyrocketing costs of training AI models. Instead of pursuing its effort to make general intelligence breakthroughs, it chose instead to focus on products it can sell to businesses today, the company said in a blog post when Amazon made the hires. The company’s co-founders, who include former OpenAI Vice President of Engineering David Luan, decided they could better pursue those advances inside Amazon, which has a growing team focused on building artificial general intelligence. They brought the bulk of the company’s talented researchers with them. But unlike a typical “acqui-hire,” where a tech company buys a startup in order to get sought-after employees, Amazon didn’t actually acquire Adept and didn’t directly pay investors. Adept’s co-founders didn’t want their backers to lose money, so they arranged for them to be made whole using funds paid by Amazon. The process was overseen by Luan, according to some of the people familiar with the matter. He did not return requests for comment. Amazon said in a previous statement that it doesn’t consider it an acquisition because it wasn’t interested in owning Adept’s business and technology. It is difficult to put a value on AI models themselves. Because the technology is changing so fast, current leading models are likely to quickly become obsolete. In order to build AGI, Amazon will need to build models much larger, more expensive and likely more technologically advanced than what Adept has already created. Reed’s view on why Amazon’s rationale on Adept should be taken at face value. → |
| 
