When competition looms, incumbents often tighten their grip on a market by snapping up rivals and rapidly shelving breakthrough technologies that could otherwise accelerate the next wave of innovation. We now find ourselves at a similar technological inflection point where rapid innovation in AI poses a deep challenge to dominant firms.

To sidestep this challenge, large tech firms have adapted the acquihire—traditionally the acquisition of a company primarily for its talent rather than its products—into a structure that evades the regulatory scrutiny that would ordinarily accompany a merger of two companies. The result is the reverse-acquihire: unlike traditional acquihires these deals avoid antitrust scrutiny by replicating the benefits of an acquisition through alternative structures that stop short of an actual purchase. These deals allow dominant firms to both license a booming startup’s intellectual property and poach its top talent, often hollowing out the remaining company in the process. READ MORE