Google DeepMind Pays Up To $90 Million To Hire Contextual AI Talent As Antitrust Scrutiny Grows: Report

Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google DeepMind has reportedly agreed to hire more than 20 researchers from AI startup Contextual AI and license its technology in a deal valued between $80 million and $90 million.

Google DeepMind Expands AI Talent Push

Contextual AI co-founder and CEO Douwe Kiela is among the researchers joining Google DeepMind as part of the arrangement, Reuters reported on Tuesday, citing a person familiar with the matter.

Rather than fully acquiring the startup, Google is licensing some of its technology while bringing key personnel into the company.

Google and Contextual AI did not immediately respond to Benzinga's request for comments.

Contextual AI raised $80 million in a 2024 Series A funding round led by Greycroft, with participation from Bain Capital Ventures and Lightspeed.

Big Tech Increasingly Turns To Acquihires

The agreement marks the latest example of a growing acquihire trend in Silicon Valley, where large technology firms secure startup talent and intellectual property without pursuing outright acquisitions, the report said.

Last year, Alphabet reportedly paid $2.4 billion in licensing fees tied to a deal involving AI coding startup Windsurf, while also recruiting several members of its team.

Google also entered a licensing arrangement with Character.AI in 2024, gaining access to the chatbot startup's large language model technology under non-exclusive terms.

Meanwhile, Nvidia Corp (NASDAQ:NVDA) struck a similar deal last year with AI chip startup Groq, which included licensing its technology and hiring its CEO without acquiring the company outright.

Antitrust Concerns Around AI Deals Intensify

These transactions are drawing increased scrutiny from regulators because they often avoid the formal review process tied to traditional mergers and acquisitions.

In March, the Acting Assistant Attorney General Omeed Assefi described such efforts to bypass antitrust oversight as a potential "red flag" in a statement to the publication.

Price Action: Alphabet Class A shares fell 2.34% to close at $387.66 on Tuesday, while Class C shares declined 2.09% to $384.90, with both shares inching slightly higher in after-hours trading, according to Benzinga Pro.

According to Benzinga Edge Stock Rankings, GOOG ranks in the 95th percentile for Quality, with the stock showing a positive trend across short, medium and long-term time frames.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo Courtesy: Markus Mainka on Shutterstock.com