Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Senators urge antitrust agencies to investigate Big Tech ‘reverse acqui-hire’ deals, (Feb 5, 2026)

By Jody Coultas, J.D.

The deals allegedly allow companies to circumvent the typical merger review.

U.S. Senators Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.), and Richard Blumenthal (D-Conn.) are urging the FTC and Department of Justice to investigate recent Big Tech “reverse acqui-hire” transactions. The Senators argue that these transactions are designed to evade antitrust scrutiny and risk further consolidating the Big Tech industry and the AI sector.

The senators highlighted three recent “reverse acqui-hire” deals, which involved Big Tech firms hiring top talent from smaller competitors and acquiring minority stakes in those competitors or licensing their technology, stopping just short of a formal acquisition or merger.

After Meta set up an AI research lab to pursue “superintelligence”, it entered into a deal with AI data infrastructure and labeling company Scale AI. Meta hired Scale AI CEO Alexandr Wang to lead Meta’s new AI lab. After the deal, many of Scale AI’s customers, including Google, cut ties with the company, viewing Scale AI as effectively a part of their competitor Meta.

Google DeepMind entered into a $2.4 billion deal with Windsurf, a startup that developed an AI coding assistant. As a part of the deal, Google hired Windsurf’s CEO Varun Mohan, co-founder Douglas Chen, and the research and development team, as well as negotiated a non-exclusive licensing agreement for Windsurf’s technology. The remaining parts of Windsurf were eventually acquired by Cognition AI in July.

In December 2025, NVIDIA announced a $20 billion non-exclusive licensing deal for Groq’s inference chip technology. Groq’s founder Jonathan Ross, president Sunny Madra, and other staff will join NVIDIA.

These three deals, according to the Senators, allowed the companies to consolidate talent, information, and resources, while bypassing the scrutiny typically applied to mergers and acquisitions. These types of partnerships that involve minority stakes and significant investments have become more common since the recent boom in generative AI technology. “If left unchecked, these types of arrangements between Big Tech companies and smaller AI developers will accelerate consolidation of the AI sector, which in turn risks driving up prices and choking off innovation.”

FTC investigations. There are two deals that are currently under scrutiny by the antitrust agencies. In March 2024, Microsoft announced a deal with Inflection AI, under which it would pay the smaller company about $650 million for access to Inflection’s models and hire away the majority of the company’s staff. The FTC opened an investigation into whether the deal was made in an attempt to avoid antitrust review and government scrutiny. In June 2024, Amazon entered a similar agreement with the AI company Adept, to license Adept’s technology and hire away the company’s co-founders. A letter from the Senators flagged this deal, prompting the FTC to launch an informal inquiry into the partnership. Finally, in August 2024, Google entered a licensing agreement with Chararcter.AI and hired away its co-founders. The Justice Department is currently probing whether Google violated antitrust laws, and whether the deal was structured to avoid government scrutiny.

In a January 2025 report, the FTC warned that such partnerships might pose “risks to competition and consumers, such as ‘… locking in the market dominance of large incumbent technology firms.’” A year later, FTC Chair Andrew Ferguson announced the agency would investigate Big Tech acqui-hires.

Companies: Scale AI; Meta; Google DeepMind; Windsurf; NVIDIA; Groq; Microsoft; Inflection AI; Amazon; Adept; Chararcter.AI

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