May 19 (Reuters) – Alphabet’s AI research subsidiary, Google DeepMind, has finalized a deal to recruit more than 20 researchers from AI startup Contextual AI and license its technology, Bloomberg News reported on Tuesday, citing people familiar with the matter.
DeepMind has agreed to pay about $100 million to Contextual as part of the agreement, while Contextual’s co-founder and CEO Douwe Kiela is among those joining DeepMind, according to the report.
Google and Contextual did not immediately respond to Reuters’ requests for comment.
The potential agreement is the latest move by the Google parent to strike a licensing deal to acquire talent. Last year, it paid $2.4 billion in license fees as part of a deal to use some of AI code generation startup Windsurf’s technology under non-exclusive terms and hire several key staff.
In 2024, Google signed a licensing deal with Character.AI that granted the search engine giant a non-exclusive license to the chatbot maker’s large language model technology.
Acquihires, where major tech companies pay large sums to secure the talent and technology of promising startups without formally acquiring them, are increasingly being viewed by antitrust regulators as an attempt to evade merger rules.
Unlike acquisitions that would give the buyer a controlling stake, these deals do not require a review by U.S. antitrust regulators.
In December, Nvidia also agreed to license chip technology from Groq and hire its CEO, without buying the startup.
Companies’ efforts to sidestep U.S. antitrust scrutiny through tactics such as acquihires are a “red flag,” Acting Assistant Attorney General Omeed Assefi told Reuters in March.
Contextual AI raised $80 million in a Series A funding round in 2024, led by venture capital firm Greycroft and existing investors, including Bain Capital Ventures and Lightspeed.
(Reporting by Juby Babu in Mexico City; Editing by Shilpi Majumdar)
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