Sen. Elizabeth Warren speaks to reporters alongside Sen. Ron Wyden at the Capitol on February 3, 2025.
Kayla Bartkowski | Getty Images
Sens. Elizabeth Warren, Ron Wyden, and Richard Blumenthal called on federal agencies to scrutinize AI transactions. Nvidia, meta and google In a letter shared with CNBC, the company addressed possible antitrust violations.
Three Democratic senators sent a letter to the Federal Trade Commission and Justice Department on Wednesday asking the agencies to review recent deals in which tech companies paid to poach certain employees from startups without acquiring them outright. Senators characterized the deal as a “reverse takeover.”
These transactions “act as de facto mergers, allowing companies to combine talent, information, and resources, while clearly attempting to avoid the scrutiny typically applied to mergers and acquisitions,” the letter said.
The senators wrote that the FTC and Justice Department should “carefully scrutinize these transactions and block or reverse them if they violate antitrust laws.” Pressure from senators could make it more difficult for tech companies to continue making such deals.
Venture capitalists and experts previously told CNBC that such deals often leave some investors and employees at a loss, while founders and AI leaders often reap big rewards. The senators said these types of deals ultimately benefit big tech companies while also stifling competition.
In their letter, the senators specifically cited Meta’s $14.3 billion investment in Scale AI in June, putting CEO Alexander Wang in charge of the social media company’s AI strategy. The letter also references a $2.4 billion non-exclusive licensing agreement that Google signed with Windsurf in July, which poached key leadership from the search company from the AI coding startup. The most recent deal included in the letter was Nvidia’s $20 billion deal in December to buy assets and bring in senior executives from AI chipmaker Groq.
“These deals could further consolidate the Big Tech industry, resulting in higher prices and stifling innovation,” the senators wrote in a letter to Assistant Attorney General Gale Slater and FTC Chairman Andrew Ferguson. “The FTC and the Department of Justice should not allow these companies to circumvent the typical reviews that apply to acquisitions and mergers.”
The letter follows Mr. Ferguson’s statement in January that the FTC reviews these types of transactions to learn whether technology companies are trying to evade regulatory review.
Note: Nvidia and OpenAI mega deal news is not good for OpenAI.
