Thanks to Geekwire for breaking this story -> Amazon hires Covariant founders, inks AI licensing deal (geekwire.com)
We wrote about Covariant on March 11th, 2024 -> AI Company Covariant is building a new AI Platform for Robots – Deal AI – Deals, Funding, Acquisitions & Mergers in AI
Within 6 months we see that Amazon also thinks Covariant is very interesting.
Amazon has
- Hired 3 of the co-founders of Covariant
- Will be receiving a non-exclusive license to Covariant’s AI models
- Covariant will continue to operate on its own. However, the 3 cofounders are all shifting to Amazon
- The co-founders are all Ex Open AI
Wonder why the Covariant co-founders would leave behind the company they founded and join Amazon. Pretty sure there is a lot more to this story than we are being told.
What are AI Reverse Acquihires/Disguised Acquisitions?
An Acquihire is when a startup is not getting much traction or Product Market Fit and also has very valuable employees. In such cases, a large technology company will ‘acquire’ the non-starting-up startup to acquire the superstar employees.
A Reverse Acquihire is where (to avoid Anti Trust concerns) the large tech company will hire only the superstar employees and usually get a license for the startup’s technology. So the company itself is not acquired.
It’s a somewhat roundabout way of getting the superstars. Necessary as acquiring the company would alert the FTC and Justice Department. It’s an Acquisition in disguise.
So Disguised Acquisition is a better name than Reverse Acquihire.
Deal AI - Deals, Funding, Acquisitions & Mergers in AI 